Leonard D. Schaeffer
Founding Chairman & CEO, WellPoint (now Elevance Health)
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Biography
Mr. Schaeffer is the founding Chairman & CEO of WellPoint (now Elevance Health), which now serves 47 million medical members and has annualized revenues of $170.2 billion. He is currently the Judge Robert Maclay Widney Chair and Professor at the University of Southern California.
Mr. Schaeffer was Chairman & CEO of WellPoint from 1992 through 2004 and continued to serve as Chairman through 2005. Under his leadership, WellPoint was selected by FORTUNE magazine as America’s “Most Admired Health Care Company” for six consecutive years; named by BusinessWeek as one of the 50 best performing public companies for three consecutive years; and identified by Forbes magazine as America’s best large health insurance company. Mr. Schaeffer was selected by BusinessWeek magazine as one of the “Top 25 Managers of the Year” and by Worth magazine as one of the “50 Best CEOs in America.”
In 2009, he established the Schaeffer Center for Health Policy and Economics at USC which emphasizes an interdisciplinary approach to research and analysis to support evidence-based health policy. In 2014, he established the Schaeffer Fellows in Government Service Program which has supported 467 undergraduates to date in high-level, summer government internships. In 2024, he established the USC Schaeffer Institute for Public Policy & Government Service.
In the federal government, Mr. Schaeffer served as Administrator of the Health Care Financing Administration (now CMS) and was responsible for the U.S. Medicare and Medicaid programs. He was also the Assistant Secretary for Management and Budget of the federal Department of Health and Human Services. Previously, Schaeffer was Director of the Bureau of the Budget for the State of Illinois and also served as Chairman of the Illinois Capital Development Board and as Deputy Director for Management, Illinois Department of Mental Health and Developmental Disabilities.
He is a member of the National Academy of Medicine. He is Chair of the USC Health System Board, Vice Chair of the Board of Trustees of the Brookings Institution, and a member of the Board of Fellows at Harvard Medical School. He has endowed chairs in health care financing and policy at the Brookings Institution, Harvard Medical School, the National Academy of Medicine, UC Berkeley and USC.
Honorary Co-Chair
Thomas M. Priselac
President and CEO Emeritus of Cedars-Sinai Medical Center and Cedars-Sinai Health System
Designing vs. Building: Designing Institutions that Endure
Interview, Part One
Leonard D. Schaeffer has spent his career at the center of American healthcare leadership. He ran Medicare at 31. He led the turnaround of Blue Cross of California when it was near insolvency. He went on to build WellPoint, Inc. (now Elevance Health) into one of the largest health benefits companies in the nation.
Yet when asked what shaped him most, he does not begin with scale or market performance.
He begins at home.
“My father was a pharmacist who ran an old-fashioned prescription pharmacy. I used to watch him mixing the powders used in creating capsule medicines when I worked for him one summer delivering prescriptions in the neighborhood. My mother was a social worker who worked for a not-for-profit organization in Chicago that focused on helping young women facing challenges in their lives.”
“I got the sense from both of my parents that to have a meaningful life, you have to help other people. They did it on a one-by-one basis.”
That belief would later expand beyond individual lives to entire systems.
As a sophomore at Princeton, Schaeffer interned in Washington, D.C., for Senator Paul Douglas. The experience changed his trajectory.
“When I was a sophomore in college, I had an experience as an intern in D.C. for Senator Paul Douglas that was eye-opening and radically changed my life. Before then, I did not realize the impact that one person could have by influencing public policy and government regulation. That changed my focus to being in positions that could impact a large number of people.”
From that point forward, he chose responsibility over proximity.
After graduating with a degree in economics, he briefly entered consulting.
“I learned very quickly that I didn’t like consulting,” he said. “I didn’t want to whisper in somebody else’s ear. I wanted to be the one making change.”
That instinct defined his leadership. He consistently stepped into complex environments that required operational discipline and structural reform.
Early roles in Illinois state government gave him experience modernizing data systems and financial operations at scale. Federal service followed under Secretary Joseph Califano during the Carter administration. At age 31, Schaeffer was appointed Administrator of the Health Care Financing Administration, overseeing Medicare and Medicaid during a period of national expansion.
“As the federal Medicare and Medicaid programs grew, Joe decided that I should be the administrator of those programs. I was running the Medicare program for people over 65, and yet I was only 31. It was a learning experience, let’s put it that way.”
That pattern of confronting complexity would define the next phase of his career.
In 1986, he was recruited to lead Blue Cross of California. Only after arriving did he understand the magnitude of the challenge.
“What I didn’t know until I got there was that Blue Cross of California was basically insolvent. I went through some soul-searching and decided that, at that point, there were two million people who were counting on the health insurance company to fund their healthcare. If we just collapsed, what would happen to all of those people?”
Under Schaeffer’s leadership, the organization worked to stabilize its financial position and compete in a rapidly changing managed care marketplace.
“When I took the job, we worked very hard to turn the financial situation around,” he said. “It really focused me on the question of how to run large, geographically dispersed, labor-intensive service organizations.”
Operating in a highly competitive environment required access to capital that Blue Cross did not have as a nonprofit entity.
“Since our competitors did have access to capital, we needed acquisition capital to have the same ability to grow and expand our business in order to compete. However, as a not-for-profit entity, we didn’t have access to capital markets.”
The solution was structural. The organization created a for-profit HMO and ultimately converted the broader enterprise in a way that preserved its charitable value.
“The big difference is that when we did this conversion, compared to prior health plan conversions in California, we took the company public and gave money and stock to two charitable organizations.”
That structure allowed the organization to compete in capital markets while ensuring its charitable value was preserved for public benefit. Schaeffer also ensured that there was no personal inurement for any BCC employees. Over the history of WellPoint, $6.2 billion was dedicated to public charities.
“I would say the thing I’m proudest of in my career is giving the $6.2 billion to charity.”
Schaeffer served as Chairman and Chief Executive Officer of WellPoint from 1992 through 2004 and continued as Chairman through 2005. During that time, the company was selected by FORTUNE magazine as America’s “Most Admired Health Care Company” for six consecutive years, named by BusinessWeek as one of the 50 best performing public companies for three consecutive years, and identified by Forbes magazine as America’s best large health insurance company.
During his tenure, Schaeffer was selected by BusinessWeek as one of the “Top 25 Managers of the Year” and by Worth magazine as one of the “50 Best CEOs in America.”
Even after retiring as Chairman in 2005, his focus on impact did not diminish. It evolved.
Rather than continuing to build operating enterprises, Schaeffer turned his attention to something less visible but equally consequential: the research, public service, and policy infrastructure that shapes how healthcare systems function and how future leaders are prepared.
He had spent decades running large institutions. Now he would invest in strengthening the ideas and institutions that guide them.
In the next conversation, Schaeffer reflects on building nationally recognized research centers, expanding opportunities for young people in public service, and how experience at the highest levels of healthcare continues to inform his perspective on policy, leadership, and institutional trust.
