Sarah London operates on the entrance traces of the hardest terrain in U.S. well being care. She’s the CEO of Centene, an insurance coverage large offering government-sponsored plans at a time when funding is tight, prices are rising, and coverage shifts create intense uncertainty.
Whereas the St. Louis–primarily based managed care insurer noticed income develop nearly 20% final 12 months, to $194.8 billion, it posted a internet lack of $6.7 billion. That was largely pushed by a write-down that mirrored the brand new actuality for well being care corporations underneath the One Huge Lovely Invoice Act championed by President Trump. Together with reducing federal Medicaid spending by greater than $900 billion over 10 years, the regulation raises prices and reduces eligibility for folks enrolled in Reasonably priced Care Act (ACA) Market plans.
These adjustments are shaking up Centene’s core companies. Greater than half of Centene’s income comes from Medicaid—it’s the nation’s greatest Medicaid insurer—with the remainder roughly divided between Medicare and Market plans. Whereas analysts don’t anticipate federal cuts to have a large influence on Centene’s prime line, they’re an indication of the challenges London faces.
Confronted with new information that confirmed its ACA plans had been enrolling each fewer and sicker folks, London determined to withdraw earnings steering final July, inflicting Centene’s share worth to fall 40% in a single day, to an eight-year low.
“It’s hard not to feel like pulling guidance and cutting the stock in half is a failure,” London instructed Fortune in a latest interview. “We’ve watched a new normal unfold in terms of how many different pressures there are on the system and the magnitude of the change we’re facing.”
London is pushing to get forward of that change. She’s been reworking Centene’s portfolio, know-how, and tradition since turning into CEO 4 years in the past, on the age of 41, making her the youngest girl to steer a Fortune 500 firm (a distinction she nonetheless holds).
Underneath London, Centene is utilizing information and know-how to higher handle a enterprise that cares for the next proportion of sicker sufferers than many different insurers do. She has additionally launched a One-CenTeam initiative to make Centene a catalyst in creating more healthy communities. In Could 2024, on the Fortune Brainstorm Well being convention, for instance, London introduced plans to accomplice in constructing $900 million of reasonably priced housing in eight states to assist increase well being outcomes.
Different Centene initiatives highlight preventive well being measures that would assist members keep away from costly medical issues—and depart Centene with a more healthy backside line
Mission-driven
After graduating with a historical past and literature diploma from Harvard, London spent two years within the movie trade earlier than deciding she needed to make an even bigger social influence. She did stints at Harvard, supporting well being, training, and fairness initiatives, and at nonprofit Well being Leads, constructing out its mannequin of community-based care, earlier than incomes an MBA on the College of Chicago. Her objective: to maneuver from storytelling to methods pondering, utilizing information to drive change.
That mission drew her to Humedica, a pioneer in leveraging huge information in public well being. “Sarah sort of cold-called me in 2011,” recollects former CEO Michael Weintraub. “It wasn’t, ‘Hi, hello.’ It was, ‘I researched your company; this is what I work on. I’ve heard about your team; this is who I want to work with.’ We made a decision to hire her that day.”
London rose by way of the ranks at Humedica, which grew to become a part of UnitedHealth Group’s Optum, earlier than becoming a member of Centene in 2020. She bought the highest job there in 2022 after longtime CEO Michael Neidorff stepped down shortly earlier than his dying.
Neidorff had constructed Centene from a regional Medicaid plan in St. Louis with about $40 million in annual revenues to the nation’s largest Medicaid managed care group. With that development got here loads of acquisitions and bloat. “The mission orientation was there from the get-go—that’s our superpower—but there hadn’t been as much focus on operating discipline,” says London, who subsequently offered off a number of noncore operations.
What distinguishes London’s management is a capability to attach the dots, says Karen Salfity, whom London introduced in from Optum to create a extra constant technique and member expertise. “Sarah can look at a very complex situation, understand the various factors, and then create an assessment … with just enough heart that you know she cares deeply,” says Salfity, who has identified London for 15 years. “The only thing that’s really changed is the scale at which she is able to do it.”
A brand new regular
London is aware of all too effectively that loads of elements in well being care are outdoors her management, not least of which is the Trump administration’s push to radically modernize and streamline federal packages. In February, the administration introduced new steps to crack down on alleged fraud in Medicare and Medicaid, on prime of the funding cuts and expired ACA tax credit which have already taken impact.
London is just not as disheartened as one may suppose. “You could take a step back and come away with the conclusion that these [programs] are under attack,” she says. However she notes that there was “quite a bit of bipartisan support” for making the sector extra environment friendly.
“I have yet to meet a politician who does not believe that affordable, high-quality health care is something very important to be able to provide for their citizens and voters.”
She sees the present reforms as underscoring the necessity to take a holistic, high-tech method to caring for weak populations. Certainly, a few of Centene’s methods anticipated the adjustments that the administration has enacted. “We have work programs in more than 17 states; we partner with nonprofits and provide job training to Medicaid members,” London says. “We run every single claim through 75 algorithms every day to look for fraud, waste, and abuse.”
“Health care is wildly overdue for a digital revolution,” she argues, pointing to an array of tech initiatives that Centene has carried out. These vary from designing supplemental meals advantages the place there are meals deserts—”as a result of we all know that when you don’t have entry to meals, treatment adherence goes down”—to predictive algorithms figuring out members prone to have high-risk births and mobilizing sources to help them. As London notes, “41% of all babies born in the U.S. are born onto Medicaid”; it’s essential that this system retains these kids wholesome to allow them to “go and get jobs and contribute to economic mobility and all the things we want as part of the American Dream.”
London is aware of how powerful it’s to ship on that dream. “The country is getting poorer and sicker,” she says. “The dollars are not infinite. At the finite boundaries, you have to make decisions about what you are going to fund and what you are not.”
