UnitedHealth Group names former Mayo CEO Noseworthy to board of directors

Dr. John Noseworthy, the Mayo Clinic chief executive who retired in December, has been named to the board of directors at UnitedHealth Group, the Minnetonka-based company that stands alongside Mayo as one of Minnesota's most prominent health care organizations.

UnitedHealth Group made the announcement Wednesday morning. In a statement, the board's Executive Chairman Stephen Hemsley called Noseworthy "an exceptionally talented and compassionate physician."

Noseworthy already serves on the board of directors for pharmaceutical giant Merck.

At UnitedHealth, he'll be eligible for an annual cash retainer of $125,000 plus annual grants of deferred stock units with an aggregate fair value of about $205,000.

"His leadership has been decisive in Mayo's achievement of consistently high performance in health care quality, safety, research and finance," the statement from Hemsley said.

In nine years as CEO at the Rochester-based clinic, Noseworthy helped Mayo raise more than $3.5 billion in its largest philanthropic campaign as the health care system emerged from the Great Recession on stronger financial footing. Mayo became a focus for statewide economic development during his tenure but also faced tough questions about the cost of its medical services.

The Minneapolis-based nonprofit Minnesota Community Measurement reported again last year that Mayo Clinic in Rochester during 2017 had the highest average total cost of care among all health systems in Minnesota.

Mayo Clinic is Minnesota's largest private employer with hospitals and clinics in five states. In 2017, the clinic posted net income of $707 million on about $12 billion in revenue.

UnitedHealth Group runs the nation's largest health insurer, UnitedHealthcare, plus a fast-growing division for health care services called Optum. For 2018, United­Health saw net income of about $12 billion on $226.2 billion in revenue.

In his statement, Hemsley said Noseworthy "is an innovator whose early advocacy for more integrated health delivery supported by the latest technology has been combined with a dedication to maintaining and enhancing the care experience for patients."

Health insurers and health care providers traditionally have been on opposite sides of the negotiating table when it comes to setting prices for services, but Noseworthy won't be the first former hospital executive to take a board position with a large carrier. Richard Bracken, the former CEO of for-profit hospital operator HCA Inc., is currently on the board of CVS Health, which includes the Aetna health insurance business. Dr. William Roper, the chief executive at the University of North Carolina Health Care System, is on the board at health insurer Cigna.

In recent years, large health insurers have been expanding into patient care, including Optum's growing network of medical offices, urgent care clinics and surgery centers.