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A $90 million idea Featured

9:37am EDT October 29, 2001

Four years ago, Kent Clapp, chairman and CEO of Medical Mutual, called an old friend, Edward Hartzell, to toss around a few revenue-generating ideas.

Together, they designed Antares Management Solutions, a wholly owned subsidiary of Medical Mutual. Today, that extra revenue is approximately $90 million generated by 700 employees from headquarters in Westlake and processing centers in Beachwood and West Virginia.

Both Hartzell and Clapp have in-depth knowledge of the behind-the-scenes workings of the health insurance industry after rising through the ranks of the Blue Cross Blue Shield family of insurers.

Together they concentrated on expanding Medical Mutual's most valuable function -- service. In 1997, Hartzell became CEO of the new solutions provider.

''We took those skills and competencies and said, 'We can create a business out of this,''' Hartzell says.

Antares' first order of business was to take over systems services for its parent company. It then signed on Central Reserve Life Insurance in Strongsville.

Antares manages disaster plan recovery by running clients' software in its data center, removing the worry of keeping data communications lines up and running. It also offers customized claims adjudication and customer service software. To tie it all together, the solutions provider trains clients in the software or supplies the entire customer service staff.

The concept was to share strengths developed over time with other health care organizations, allowing them to concentrate on core competencies. By understanding the entire gambit of what health care companies do, Antares offers cost savings in operational activities.

Consumers want service from their health insurance provider, but behind that service lies a tangle of typical business demands: e-commerce design and hosting, network security, disaster recovery, telecommunications, capacity planning, HIPPA compliance, software design, programming and training.

''We are actually an extension of that insurance company (client),'' explains Hartzell.

Recognizing exactly what Antares is and is not allows the company to look to the market for the best software systems, even turning to competitors' software to offer more flexibility to its customers. Hartzell says the company is not married to one software system because it is not just selling software -- it is selling solutions.

The company also doesn't let the lure of big dollars entice it from its niche. If a customer does not fit the target demographics of a small- to mid-sized company -- $100 million to $500 million in premiums -- Antares does not pursue it, Hartzell says.

Antares has just 15 clients, but sales per customer can amount to as much as $10 million annually. Most are based outside Ohio to avoid servicing a company in competition with Medical Mutual. How to reach: Antares Management Solutions, (440) 414-2100 or www.AntaresSolutions.com

Deborah Garofalo (dgarofalo@sbnnet.com) is associate editor of SBN Magazine.