James Stevenson is president of HCH Administration, Inc., where he's worked for 17 years. Located in Peoria, HCH Administration handles the administration of health benefit plans, covering 125,000 members, and employs approximately 160 employees.
Stevenson graduated from Westminster College in Fulton, Mo., with a Bachelors degree in speech and business administration.
Stevenson is a member of the Young President's Organization (YPO) and presently serves as the assistant education chair to the Illini YPO Chapter. He serves as a board member on Health Care Horizons of Illinois, HCH Administration, Inc., and the National Association of Employee Benefit Administrators. He volunteers his time by serving on the Ducks Unlimited Banquet Committee, Country Club of Peoria Swim Committee, Easter Seals Lyle Finch Clay Bird Classic, the American Red Cross Safe Communities Committee, the IVC Education Foundation Board, IVC Education Golf Committee, and the Human Services Board. Following in his mother's footsteps, he was also president of the board of the local chapter of the Alzheimer's Association.
Tell about your background, schools attended, family, etc.
Our family moved to Peoria in 1968 from Northbrook. With family in Peoria and understanding the challenges of a big city, my mom and dad put our roots in Peoria. My older brother, younger sister, and I all attended Kelly Avenue Grade School and Bergan High School. College took me to Westminster College; I focused my studies in business administration and speech and graduated in 1984, with majors in each.
You've been with HCH for about 17 years. Tell about the different positions held prior to assuming president.
I started working for HCH Administration, Inc., in April 1986. My initial responsibility was to bring in new business. As we brought in new business, we also had to service the accounts. By servicing the accounts, we had to interact with every department within the company, and this helped me learn many of the inter-workings of HCH Administration, Inc. As I became successful with sales, I was promoted to vice president marketing and later was promoted to president.
Tell about the products and services offered by HCH.
HCH Administration, Inc., is an employee benefit plans administrator that's offered comprehensive products and services to self-funded and fully insured clients for more than 20 years. Founded in 1982 in Peoria, HCH Administration, Inc., services clients nationwide. As one of the nation's premier third party administrators, HCH provides employee benefit solutions to employers of all sizes and industries.
HCH Administration's vision is "Providing Innovative Solutions and Quality Service." Our mission is to provide outstanding service to our clients in an increasingly complex marketplace; maintain excellence and expertise through exceptional leadership, employee education, and continuing technological advancements; and proceed into the future by building on the past.
Our goals continue to focus on providing the marketplace with a "one-stop" shop. HCH strives to provide inclusive services for any employer group regardless of size or industry. We're currently assisting our existing clients with their HIPAA compliance issues and maintaining the edge we've succeeded to establish in the past.
HCH Administration, Inc., offers the following services: claims administration; full eligibility services; COBRA administration; HIPAA compliance; Section 125 flexible spending; IT department that includes in-house programming; marketing department that provides reinsurance, life insurance, and PPO negotiation services; filing of reinsurance claims; plan document coordination; subrogation investigation with the Phia Group as a partner; Web site reporting (HIPAA Privacy/Security); online services for the employer as well as the individual employees; and utilization management including pre certification, large case management, continued stay review, disease management, and demand management.
How has HCH changed in the past 20 years?
The payment of medical claims is much more difficult today then it was 20 years ago. When I started in this business, claims adjustors paid claims with an adding machine, a pen, and a typewriter. At that time, we paid about 100,000 claims representing a few million dollars in benefits. Today, we process more than 2 million claims per year representing more than $275 million in benefits for our covered participants. To be good stewards of our clients' money, we have to invest our resources on great people and technologically advanced infrastructure. We need to employ the advanced technology to free our staff's time up to focus on adjudicating the appropriately discounted claim.
Businesses have had to shift costs of providing health care benefits to their employees, as well as other measures to stay profitable. What are some of the solutions HCH has come up with to help businesses continue to provide some type of health care benefit?
We approach each client individually to custom design an approach to fit that specific client. Creativity is the key to matching the cost of the plan with the philosophies and needs of the company. We've designed multiple option plans, putting the responsibility on the employee to choose a plan that fits his need; point of service plans; HMO look-alike plans; exclusive network plans; flexible spending account plans; cafeteria plans; and health savings account plans.
In addition to creative plan design, all clients need a solid cost containment strategy that requires flexible network options, specialty network options, primary and wrap network options, a solid prescription benefit manager, utilization management, disease management, and large case management. HCH Administration, Inc., works hard with proprietary products and with highly qualified partners to assist when outsourcing provides better client results. Our goal is to try to mitigate medical trends. We accomplish this by establishing a plan design that controls discretionary demand and implementing cost containment programs that monitor the cost and supply of the health care that's delivered.
How has the required HIPAA compliance affected your industry and the businesses you serve?
Theoretically, HIPAA makes sense; practically speaking, it's been a huge adjustment for our industry. HIPAA has caused all of us who deal with highly sensitive and personal information to re-engineer how to handle this information. To make sure this information is handled confidentially, we have a team of individuals look at how Protected Health Information (PHI) flows internally and externally. This team has modified and fortified our handling of PHI at every level of our company. Some of the changes we've implemented include re-writing reports to de-identify the report, moving monitors so they don't display to common space, full HIPAA training for all staff, agreements signed by business associates, HIPAA waivers signed by all folks that enter our building, and constant checking of our process and information flow.
Statistics are rising in regard to the working uninsured and underinsured. How is this affecting health care costs?
The underinsured and uninsured are a huge tax to those people who either have full coverage from an employer or some other entity. Any business that serves a population that can't pay its bills makes it up on those who can. Unfortunately, it can be a significant portion of the care delivered in our system, and it's getting larger daily.
Different theories exist for the high cost of health care. Can you address the issues of physicians, hospitals, drug companies, and malpractice insurance?
Malpractice insurance, over-supply of equipment and technology, defensive medicine practices, low supply of quality practitioners, prescription drugs, direct-to-consumer marketing, access to information, and mandated benefits-all have an impact on our health care dollars. Additionally, people in this country want the best of everything, and they don't want to wait. A huge amount of pressure is being applied to a system that's still a science.
In the next decade, how do you envision health care benefits changing?
On the retail side, employers are going to continue to shift more cost onto the employee through higher deductible plans. We're also going to have to unify the flow of data, which will allow a predictive modeling tool to identify individuals who are going to have significant claims in the next few years. Then we'll need to work with those people on a proactive basis to mitigate their future claims. Eighty percent of health care is driven by 20 percent of the population. Lastly, we'll need tools that allow us to make educated decisions about the providers we choose. Tools that allow people to compare providers and the providers outcomes. These tools will engage the employees in their health care decisions.
What's your opinion of converting to a national coverage?
Health care is quickly becoming one of the largest products in this country. Last year, health care represented 15 percent of our Gross Domestic Product (GDP) or $1.7 trillion. If we nationalize health care, will we be stifling one of our nation's growing products? To a certain degree, we need to embrace the health care system and foster its advancement. I don't see a nationalized system in the next five years.
As Americans are living longer, the bulk of insurance dollars are spent in the last few years of life. Do you see a change in how care will be delivered in the future? Hospice vs. extraordinary surgeries and treatments?
Our country is based on hope. Personally, I don't see getting to the point where care is rationed based off of some set of criteria due to age or likelihood of a positive outcome.
Your company must receive numerous questions from confused benefit plan holders after their bills arrive. Explain HCH's philosophy of customer service.
Every call we get has at least two components: the business question and the emotional element. We recognize these two elements are in almost all telephone calls we receive. Customers (benefit plan holders) calling HCH Administration, Inc., most likely will be in the middle of an emotional or financial situation and have a question about their benefits. We train our employees to recognize the emotional side of the telephone call to move to the business side, and then we answer each phone call to the best of our ability.
How should a company evaluate changes to their existing health care benefit plans?
With health care running at about a 15 percent increase per year, employers need to understand how this increase will affect their budget. What adjustments can be made to the plan to offset that increase without alienating the workforce? It's a delicate balance and one that's unique to each employer.
What advice would you give human resource and business owners in regard to implementing or changing health benefits?
Like any business challenge, it's best to think long term. Try to balance your human resource needs with your budgetary needs. Think in terms of what's best for our entire workforce.
What misperceptions, if any, exist regarding your industry?
The biggest misperception in our industry is that HCH Administration, Inc., is an insurance company. We aren't an insurance company. We administer health care claims based upon the benefit plan offered by our employer clients. The dollars our clients spend on health care are normally part of their general assets. We work hard to make sure we spend those dollars efficiently.
You served as past president of the Alzheimer's Association. The death of Ronald Reagan heightened awareness of that issue internationally. What's your opinion of stem cell research?
I support stem cell research. Anybody who's experienced a disease like diabetes, MS, or Alzheimer's knows how difficult life can be. If stem cell helps bring a higher quality of life to any disease, we'd be moving in the right direction
What would you like to discuss that we haven't asked?
I would like to leave you with some interesting thoughts.
- Last year, Merck & Co. spent more on advertising Vioxx than Anheuser-Busch spent advertising Budweiser.
- There are at least 135 different ways physicians treat the same urinary tract infection.
- Today, the greater Pittsburgh area has more MRI scanners (160) than the entire country of Canada.
- 90 million Americans live with chronic diseases at a cost of more than $400 billion per year.
- Obesity and overweight medical costs exceed $123 billion per year.
- Nationally, health care costs employers more than $6,500 for each employee.
- The United States spent $1.7 trillion on health care last year. IBI
