Springfield, MO

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New entry in health-insurance market

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by Paul Flemming

SBJ Staff

Among the original incorporators of Med-Pay Inc. in 1981, James F. Morris has announced the formation of Gallagher Man-Morris. The new joint venture will offer third-party administration for self-insured plans as well as be a brokerage for full-service health insurance.

Morris is chairman of the new company, Jim Sanders its president and Jerry Sparks its secretary/treasurer. The involvement of A.J. Gallagher Insurance, with its technology and network contracts around the country, will help the self-insurance side of business.

"They have the most sophisticated equipment to monitor claims, and (Gallagher's) size in the industry gives them a good deal of leverage," Morris said.

The decision to start the business came as casualty insurance customers of Man-Morris Insurors expressed concern about the rising cost of health insurance.

"It started back in summer, when we had some customers concerned about the possibility of increased costs," Morris said. "They wanted us to set up a parachute, is what we called it."

The new company has a contract with St. John's Health Systems to provide medical services to businesses with self-insured health plans. Morris said three months of negotiations with Gallagher and St. John's concentrated in the last few weeks have kept the 67-year-old off the golf course as the deals came to conclusion. "It's been a lot of work to build a better mousetrap."

"There are massive amounts of self-insured businesses in Springfield," Morris said. In addition to local businesses who self-insure health plans, Morris identified national companies with a local presence as potential clients. Gallagher's national provider network will be attractive to those customers, Morris said. "We'll have local service with a national flavor."

Morris said his projections for the new company call for it to be among the top three players in town within the next three years.

Despite Humana Inc.'s announcement that it is withdrawing from the Springfield market, Morris said options to keep health insurance costs in check will remain.

"With the competitive atmosphere of both hospitals, and with the quality management of both hospitals, the cost of buying insurance will be well in line with national averages, with quality of care above that," Morris said. "We have two great institutions in Springfield, Mo., and I'm proud of that. As long as the competition stays between the two hospitals we'll probably have some local increases, but we'll still be below the national average."

In light of Humana's announcement and surveying the marketplace, Morris said he sees a shift occurring in health insurance.

"The whole industry has been in an upheaval," Morris said. "I'm confident that when the jousting's all over in the next few years, employers with over a hundred lives will eventually be self-insured through a PPO after all, it is a benefit, and employees should be able to choose their own doctor."

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