WellPoint keeps ahead in tough health industry.

Editor's Note: This special report contains the results of a project where the editorial staff of the Business Journal set out to choose the "Best Companies" in the greater San Fernando Valley in 14 different categories.

Troubles abound for many of the smaller players in the managed health care industry as well as some of the larger ones as they struggle to tighten expenditures in a sector battling escalating costs.

Yet, Thousand Oaks-based WellPoint Health Networks Inc. continues to break the mold when it comes to offering innovative and inexpensive health products for its customers while, year over year, boosting its bottom line.

As a result, WellPoint has earned some of the highest accolades from its peers in the industry and those that monitor it.

WellPoint is also the winner of the Business Journal's Best Employer award. Its list of other honors is long. WellPoint, parent company of Blue Cross of California and the nation's second-largest publicly traded health care organization, has been named the most admired health care company in the country by Fortune Magazine for five years running.

Wellpoint appeared on Forbes' Platinum List in 2002 and, most recently, made the No. 2 spot on BusinessWeek Magazine's list of the Top 50 performing public companies on the S&P 500.

But to get that healthy, the company had to take its medicine.

When its Chairman and Chief Executive Officer, Leonard D. Schaeffer took over Blue Cross of California in 1986, the company was hemorrhaging roughly $165 million a year.

Schaeffer cut roughly 3,000 jobs and ordered a complete restructuring of the company, including the establishment of new departments broken down by customer segments for individuals, small and large companies, rather than by job functions. The slash-and-burn approach, followed by a carefully orchestrated strategy to make the Blue products more affordable and flexible, has paid off.

Sales for WellPoint in 2002 were $17 billion, up 39 percent from $12 billion in 2001. Net income was $703 million, a 70 percent jump from 2001.

Under Schaeffer's guidance, Blue Cross of California is now considered the most profitable arm of the Blue product line, which WellPoint continues to expand, most recently, through a $906 million merger with Milwaukee-based Cobalt Corp., parent firm of Blue Cross & Blue Shield United of Wisconsin.

"WellPoint is an exemplary company with a terrific track record and is a recognized leader in our industry," said Stephen E. Bablitch, Cobalt's chairman and CEO. "They have the size and scale that Cobalt needs to take our company further than we could have done alone. WellPoint has an excellent reputation as an employer. The values we have established here at Cobalt are identical to the values that WellPoint brings to us.

"We strive to be best in everything we do," said Bablitch. "We are intensely customer-focused and maintain the highest ethics and we greatly value our employees. WellPoint has an excellent reputation as an employer, and Leonard Schaeffer has been named as one of the top business managers in the nation. In short, this is a very impressive company."

National reach

WellPoint also markets Blue Cross and Blue Shield of Georgia, Blue Cross and Blue Shield of Missouri, HealthLink in seven mid-western states and UNICARE on a national basis.

As an employer, WellPoint has more than a healthy bottom line.

As much as the company is known for its strides to revamp traditional HMO models, WellPoint has also earned a reputation for offering innovative programs for fast-tracking its employees into management and top-level positions, particularly the women among its 17,000-member work force.

WellPoint has been chosen as one of the top 30 companies for executive women by the National Association for Female Executives (NAFE) for three years in a row. The company has 18 women in key top positions: four of 12 presidents and executive vice presidents; five senior vice presidents, and nine general managers.

The company was also named a recipient of the 2003 Catalyst Award for its outstanding initiatives that support women's career development and advancement. Catalyst is a nonprofit research and advisory organization promoting women in business in the United States and Canada.

"There is a culture in place throughout the company that respects and admires women in terms of their employment and their long-term career needs," said Rene White Fraser, president of the National Association of Women Business Owners/Los Angeles chapter. "We also represent the 214,000 women-owned small businesses in the Los Angeles County area and WellPoint has developed products for these smaller employers that make it possible for them to access flexible and affordable insurance programs."

WellPoint is also considered by many in the Valley business community as a solid corporate neighbor, recognizing not only those organizations that come calling, but the smaller ones the company's employees care about and want to serve for their own personal satisfaction.

In fall of 2002, at the request of its employees spread out over 88 offices nationwide, WellPoint' s marketing and public relations launched its "Living the Values" program whereby workers can share their own personal stories of community and charitable involvement with their colleagues.

The program has since become an integral part of WellPoint's external corporate citizenship campaign.