Independence Health Group, Philadelphia’s largest insurer, picks its new CEO
Munson currently leads IBX’s largest subsidiary, AmeriHealth Caritas, a Medicaid insurer. She will keep an oversight role there.
Kelly A. Munson will succeed Gregory E. Deavens as president and CEO of Independence Health Group, the parent of Independence Blue Cross and the Philadelphia region’s largest health insurer, the Center City company announced Monday.
Munson will move into the top job at Independence on Oct. 1 from her role as CEO of AmeriHealth Caritas, a Medicaid insurer that is majority-owned by IBX and accounted for three quarters of IBX’s $32 billion in revenue last year. Munson started at AmeriHealth Caritas in February 2024.
Independence said that Munson, 53, will keep an oversight role at AmeriHealth Caritas, which has Medicaid business in 13 states and Washington D.C., but details on that arrangement are still being worked out.
Independence said its board conducted a national search for a CEO to replace Deavens, who in January announced his intention to retire by the end of this year. Deavens, 64, took over from Daniel J. Hilferty at the beginning of 2021. Deavens will remain with the company through December to help with the leadership transition.
“Kelly is a savvy and experienced healthcare leader, grounded in a deep commitment to affordable, accessible, and high-quality healthcare for all the communities we serve — both regionally and nationally,” Charles Pizzi, chairman of the Independence board, said in a statement.
Challenging insurance environment
The leadership change at Independence is happening at a challenging time for health insurers as rising costs, including for drugs like GLP-1s, and increased use of healthcare services squeeze insurers’ finances. Last year, Independence had its first annual loss since 2015.
Independence Blue Cross, separate from AmeriHealth Caritas, offered buyouts to employees last month in an effort to streamline its operations. That part of Independence Health Group employed about 4,100 people at the time.
Last year, AmeriHealth Caritas had its slowest revenue growth since 2018 and its first loss since 2019. The slow revenue growth was caused by AmeriHealth Caritas’ failures recently to win new state contracts to manage Medicaid benefits. Its bottom line sank into the red after enrollment declined as COVID-era Medicaid rules ended, and tens of thousands of people dropped out of Medicaid coverage.
AmeriHealth Caritas is based in Newtown Square and employs about 10,000 people.
During her year and a half at AmeriHealth Caritas, Munson said in an interview, she worked on fixing what she described as a “mismatch” between what states were paying and the level of care needed by the Medicaid enrollees who were left after the post-COVID retrenchment.
“I’m happy the gap is beginning to close,” said Munson who previously worked for Aetna and other Medicaid companies.
Munson also revamped top management at AmeriHealth Caritas to make sure the company is “poised and ready for growth,” she said.
With the appointment of Munson as CEO, Independence follows a playbook it used before. Hilferty had been CEO of AmeriHealth Caritas (then called AmeriHealth Mercy) before being promoted to Independence CEO at the beginning 2011. Hilferty led the Medicaid subsidiary for 13 years.
Deavens’ tenure
Deavens joined Independence as chief financial officer in 2017, about four years before he succeeded Hilferty.
Aside from leading Independence during most of the pandemic, Deavens contended with new competition in IBX’s core market of Southeastern Pennsylvania from another Blue Cross Blue Shield company. Highmark, based in Pittsburgh, started selling health insurance in the area last year after staying away for decades.
For many years, Independence contracted with Highmark for back-office services. When Highmark became a direct competitor, Deavens and the Independence board decided to build its own systems. It spent $144 million on that project last year.
As CEO, Deavens prioritized expanding access to behavioral health services. He said in April that Independence had increased by 47% the number of mental health service providers in the company’s local network since 2022.
A highlight of Deavens’ tenure was his pivotal role in 2022 in pulling together a coalition of nonprofit health systems to provide a $50 million lifeline for St. Christopher’s Hospital for Children, which desperately needed help to stay afloat at the time.