Thursday, August 21, 2008 East Central Illinois

Managed-care company buys HCH Administration Inc.

By Debra Pressey
Friday, July 18, 2008 8:08 AM CDT

URBANA – The managed-care company launched by Carle Clinic nearly three decades ago is once again expanding beyond its home base in Urbana, this time picking up some 64,000 new members from a company in Peoria.

Health Alliance Medical Plans said it has finalized its purchase of HCH Administration Inc., a company that provides administrative services for employers with self-funded health benefit plans. All the new members from HCH are on self-funded plans, the companies said.

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Health Alliance Chief Executive Jeff Ingrum said the purchase significantly boosts Health Alliance's presence in Peoria, and the company is poised to expand in that market even more early next year.

Health Alliance will be an HMO option for some 90,000 Caterpillar employees and family members in the Peoria and Decatur areas, and expects to pick up about one-third of them, he said.

The HCH acquisition boosted the number of Health Alliance members to about 315,000 in Illinois and Iowa, plus in two new markets where HCH has self-funded plan business – in Albuquerque, N.M., and Springfield, Mo.

Health Alliance already had about 50,000 members on self-funded plans, Ingrum said, and buying HCH will allow the company to offer more cost-effective services to all its self-funded plan business.

For its part, HCH saw Health Alliance as a company that can provide opportunities in an increasingly competitive marketplace, its CEO Jamie Stevenson said.

Launched in 1979 by Carle Clinic under the name CarleCare, Health Alliance has been building for growth for the last five years and is ready for this kind of expansion, both in market and services, Ingrum said.

Among some of the initiatives more members may be seeing soon:

Health Alliance has been running two pilot programs with handfuls of employers to help promote wellness among members and cut costs for employer groups. One focuses on helping employee members make lifestyle changes, such as quitting smoking and losing weight, that can make them healthier and reduce their health care costs. The other pilot program involves a restructuring of pharmacy benefits to give co-payment price breaks for medicines deemed to provide the most health value, Ingrum said.

Both these programs will run another year before the company makes a decision about offering them as an option for all its membership, he added.

Health Alliance has also begun offering a new, more affordable hybrid benefit plan it created to combine the best benefits of HMO and PPO plans. Called a CCP, or Coordinated Care Plan, it was created as a way around an Illinois restriction on including deductibles in HMO plans, Ingrum said.

A CCP is basically a redesigned PPO with the health management benefits of an HMO, but with smaller deductibles than many PPO plans offer, he said. The downside for members, "if there is one," Ingrum said, is they're limited to a smaller network of providers and face higher out-of-network costs than they would in most PPO plans. Plus CCP members are required to coordinate their care through a primary care doctor.

But the CCP deductibles might make the restrictions worthwhile for some members weighed down by multithousand-dollar per person deductibles in their PPO plans: The CCP deductibles will run from about $500 to $1,000 per person, Ingrum said.

"I envision this as a way to bring better value to those employers pushed into high-deductible plans," he said.

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