Clutching one of those composition books that were ubiquitous when I was a kid, Ed Ullmann came to my house in Mount Tremper on a recent Friday afternoon. Ed has been a neighbor a long time. Despite a peripatetic lifestyle that has taken Ed to many distant locales, he and his wife of 35 years, Patty, a nurse, have kept their house on Miller Road, about a mile away from where I live, for the 40 years I’ve known him. He’s living there full-time again now.
Ed is best known as the founder of WellCare, one of the first health maintenance organizations in the country. WellCare morphed out of a small group of Ulster County people Ed organized called the Mid-Hudson Health Plan. The first name on the first page of the composition book Ed wanted to show me was mine. The date on the entry was October 9, 1981. The other names on that page were those of Chuck Lawson (president of Rotron), Art Weintraub (then with Mid-Hudson Pattern for Progress, I think), and Assemblyman Maurice Hinchey. It took several years of meetings before Ed’s unflagging efforts brought WellCare to a successful birth.
I was glad to see Ed. He hasn’t changed much over the years. You’d probably be happy to have half the ebullience and optimism Ed exudes. I would. The enthusiasm with which he’s been blessed is contagious.
An idealistic young pharmacist, Ed had once been a political wunderkind, elected to the Ulster County Legislature at the age of 24 (in an upset, he bested Shandaken Town Supervisor Ray Dunn by one vote). He later served as the county’s mental health director when Tom Roach was legislature chairman.
The birth of WellCare
WellCare, Ed’s baby, grew quickly after its establishment. Ed proved a principled and visionary leader, a prophet before his time. The emphasis in HMOs should be not on fees for services, but on prevention, awareness and wellness, Ed felt. Back in the 1980s, Ed was arguing that affordable health care needed to be extended beyond the traditional insured population to the entire public. He sought to integrate Medicare patients into the WellCare culture and emphasized primary care.
His thinking was expansive in other ways. To add to the community’s cultural base, Ed partnered with art and theater groups to present programming at WellCare’s posh corporate headquarters on Hurley Avenue. Ed was feted with national “Entrepreneur of the Year” awards. The enthusiastic young man from Mount Tremper was riding high. At its peak, WellCare had 120,000 members.
WellCare came under competitive pressure from more traditional insurance plans. Massive consolidation in the industry had lowered premium income at the same time the costs of re-insurance had soared for WellCare. Ed came to believe that his company had to grow even faster to survive. So the firm went public, converting from non-profit and getting a listing on Nasdaq. With $30 million in fresh capital, WellCare hired additional managers, updated its computer systems, and prepared for a busy future. It was an expansive time.
The rosy future was not to be. In 1996 the business magazine Barron’s criticized the company’s financial records. It maintained that WellCare had greatly inflated its profits picture. A big kerfuffle followed. The financial statements for 1994 and 1995 had eventually to be revised. The stock plummeted. Ed maintained that short sellers had undermined the company in order to make a big profit for themselves.
Lawsuits followed. Ed was eventually forced out.
What did Ed learn? “The more you move off the local and the personal, you lose buy-in,” he told me. “Going public, with all its financial and organizational advantages, was a big mistake.” Community institutions must avoid abandoning their roots and becoming institutionalized.
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