President and CEO, Health Net
Born: ca. 1956, in New York City, New York.
Education: Stanford University, BA.
Career: California Healthcare System, 1985–1988, senior vice president and chief operating officer; Bay Pacific Health Corporation, 1988–1991, president and chief executive officer; Shattuck Hammond Partners, 1991–1996; Health Systems International, 1996–1997, chairman of the board of directors, president, and chief operating officer; Foundation Health Systems (later renamed Health Net), 1997–1998, president and chief operating officer; 1998–, president and chief executive officer.
Address: 21650 Oxnard Street, Woodland Hills, California 91367; http://www.health.net.
■ Jay Gellert always had an interest in the business side of health care. He worked his way up through the ranks at various prestigious insurance organizations before becoming president and chief executive officer of Health Net. After taking over as head of Health Net, he led the company through many changes, incorporating technology and a previously unheard-of cooperation with competing health insurance companies to set up a Web site that would make life easier not only for the insurance companies but for the physicians and patients using it as well. Always interested in ease of application for the end user, Gellert led Health Net into a successful and profitable future.
Born in Brooklyn, New York, Gellert attended Stanford University, where he earned a BA. After holding various jobs in healthcare operations in California, in 1985 Gellert joined the California Healthcare System as senior vice president and chief operating officer. In 1988 he moved to Bay Pacific Health Corporation as president and CEO, where he worked until 1991, when the company was purchased by Aetna Life Insurance Company. The company underwent restructuring and reorganization, and Gellert's position was dropped. He then moved to Shattuck Hammond Partners before joining Health Systems International, where he worked as chairman of the board of directors of Health Systems' two main subsidiaries, Health Net and QualMed. In 1996 he was appointed president and chief operating officer. While Gellert was still with Health Systems, the company merged with Foundation Health Corporation to form Foundation Health Systems, a health insurance provider. Gellert became president and COO of the newly formed company. In 1998 the company was renamed Health Net, and Gellert became president and CEO.
The first thing that Gellert did as president and CEO was to shut down the unproductive divisions of the company and redirect it toward its core products. According to the San Fernando Valley Business Journal (January 6, 2003), "Those and other cost-cutting measures would help steer the HMO out of a $165 million deficit that year to a $164 million profit by 2000." Gellert was also interested in improving the ease with which physicians and customers dealt with Health Net. Shortly after Gellert took over as CEO of Health Net, he formed a new division of the company called New Ventures Group. It was started as an individual technology group that centered on creating an easier way for Health Net's partners and customers to deal with health care, with online services for physicians to prescribe medications and keep records. Managed Healthcare Executive (February 2002) quoted Gellert as having said about the new division, "Everything we do is focused on solutions…. We wanted New Ventures to be separate from Health Net because they were to focus on solving problems, not on dealing with all of the bureaucracy that's a natural part of any large company." New Ventures was later brought into the company for logistical reasons, but they kept their freer spirit.
In 2001 Gellert and his vice president, Gary Velasquez, worked on a radical idea to unite the top health insurance competitors in California by standardizing claims and forms on a Web-based system that they could all use, simplifying matters for physicians and patients. They planned to launch Web-based Universal Credentialing DataSource (CAQH), a site that potentially could cut down on 50 percent of administrative expenses in the long run. The Council for Affordable Quality Healthcare, a nonprofit union of more than 20 healthcare networks, was set up to run this system, and Gellert was nominated as one of the chairmen.
The system allowed providers to submit one application to one database that met the requirements of all the CAQH health plans. It even allowed physicians to update account information online, sending an alert to all participating organizations when changes were made. This was considered quite a triumph, because it meant that previously battling health insurance groups were working together for the benefit of physicians and their patients. Health Net also partnered with the Boston Company NaviMedix, which had a system that allowed physicians to check patient eligibility online. In one test run in New York, the program cut faulty claims by 75 percent. Because of his success with Health Net, in 2001 Gellert was asked to join the board of directors of Ventas, one of America's leading healthcare real estate investment trusts.
News of his innovations spreading, in 2002 Gellert was asked to speak at the IPA Association of America's Seventh Annual National Meeting. Also in 2002 Health Net posted a 22 percent rise in second-quarter profits, which had not been true for quite some time as the company had been suffering losses for a few years. Gellert credited this rise to the company's refocused energy, giving Health Net the opportunity to develop better products. According to Clifford Hewitt, a healthcare analyst, Health Net had seen a marked improvement in process, and this improvement could be traced back to 1998, when Gellert had become CEO. His vision and enthusiastic application of improvements were credited as the basis for the company's turnaround.
By 2003 Gellert had focused Health Net on ensuring that claims submitted electronically were turned around as quickly as possible. He paid attention not just to solving problems but also to uncovering their root causes and fixing them. Take the issue, for example, of doctors submitting claims that Health Net never received. Instead of simply resolving an instance of that problem, by 2003 the company was looking to find out why it happened, as a way to stop it from happening again. That same year, Gellert was reappointed chairman of the Administrative Simplification Committee of CAQH.
Ebeling, Ashlea, "Health Care/Heavy Equipment," May 21, 2001, Forbes.com , http://www.forbes.com/best/2001/0521/088.html .
Fox, Jacqueline, "From Turnaround to Turning a Profit: Jay Gellert Has Taken Health Net from a Record-Breaking Deficit to a Record-Breaking Profit in an Industry Where Many Struggle Just to Break Even," San Fernando Valley Business Journal , January 6, 2003.
Gammill, Marion, "FHS May Jettison Its Dental Programs; Sustainable Profits Sought in New Plan," Los Angeles Daily News , February 12, 1998.
"Health Systems International Inc.," Best's Review , July 1996, p. 119.
McCue, Michael T., "Progressive Behavior: Health Net CEO Jay Gellert Takes Technology and Holistic Medicine outside the Box," Managed Healthcare Executive , February 2002, p. 14.
Pondel, Evan, "Woodland Hills, Calif.-Based Insurer Health Net's Vital Signs Get Stronger," Los Angeles Daily News , July 26, 2002.
Rabinowitz, Ed, "Simpler All Around: Lightening Doctors' Administrative Load Can Improve Relationships," Healthplan Magazine , March/April 2003, http://www.aahp.org/Content/NavigationMenu/Inside_AAHP/Healthplan_Magazine/March_April_2003__Simpler_All_Around.htm .
Rauber, Chris, "Gellert's Leaving Bay Pacific HMO Raising a Hubbub," San Francisco Business Times , November 8, 1991, p. 1.
Rogers, Michelle, "Magazine Technology: Drug Traffic," HealthLeaders December 2002, http://www.healthleaders.com/magazine/feature1.php?contentid=40474 .
Taub, J. S., "Bay Pacific Sale Gives It Aetna's Deeper Pockets, San Francisco Business Times , July 19, 1991, p. 3.
Webb, Marion, "HMO Exec Salaries Studied as Rates Rise," San Diego Business Journal , September 3, 2001, p. 1.
"Woodland Hills-Based Health Net," San Fernando Valley Business Journal , November 10, 2003, p. 30.
—Catherine Victoria Donaldson