Flashback to the early 1990s — the word “Google” is limited to the vocabulary of gurgling babies, cell phones are the size of small toasters , and health insurance claims sit in towering stacks of paper, filling a huge room at Choice Care in Cincinnati.

Enter Larry Savage, then a customer service specialist at the struggling HMO.

Within three years, 90 percent of those paper piles went from being processed by hand to being processed without a single staff member laying a finger on them. The key: Savage’s initiative to implement optical recognition technology, revolutionary for its time, to read and store the claims.

“If there’s one thing I feel passionately about, it’s new ideas,” sums up Savage, now regional CEO in charge of commercial business activities in Humana’s Ohio, Kentucky, Indiana, Kansas and Missouri markets.

It’s the ability to cultivate and execute new ideas, he believes, that is essential to a better, more efficient healthcare system.

The Dog, the Person and the Food Bowl

It’s safe to say that Savage didn’t always envision himself in the corporate world. The Northern Kentucky native graduated from Eastern Kentucky University with a degree in rehabilitative counseling, and, a self-described child of the ’70s, a desire to “heal the world.” He married fellow Northern Kentuckian Denise Denham, whom he met in the seventh grade, and worked for three years helping adolescents and adults with substance abuse problems.

His interest in business didn’t become piqued until his next job, in human resources for the Fortune 500 company NERCO Coal. From there, he secured a position in customer relations at Choice Care and came on board with a vision to make the company profitable.

Steve Ringel, now vice president of customer service at Humana, met Savage at Choice Care in 1991. At that time, Ringel worked in information technology. “It was so bad back then,” he recalls. “Computerization had not applied itself at all other than a back end basis.” Their group developed a plan they jokingly called “the dog, the person and the food bowl.”

“The mission was to make everything so efficient that you needed a person to feed the dog, and the dog there to keep the person from touching the computer,” Ringel explains.

The new processes they instated, such as allowing doctors to submit claims electronically and using computers to store the claims, saved Choice Care the cost of hundreds of employees and enabled it to pay doctors much more quickly and accurately. With the resulting cost savings, the company invested in programs that helped raise its reputation for customer service to one of the best in the nation.

When Savage interviewed Dr. Derek van Amerongen, now chief medical officer for Humana of Ohio, for his job 10 years ago, van Amerongen was immediately attracted to Savage’s ability to think outside of industry parameters.

In the midst of the contentious, confrontational healthcare industry of the ’90s, Savage espoused treating physicians and hospitals as customers and vital partners — a breath of fresh air in an atmosphere where insurance providers and physicians were often pitted against each another for dollars.

Van Amerongen cites Savage’s emphasis on partnership as the reason that many of the region’s hospitals are Humana clients today.

The Power of 1,400 Minds

Choice Care was a local market leader by the time it was acquired by Humana in 1997. (Humana’s “perfect service” program is a descendant of the “exemplary service” program that Savage started at Choice Care.)

After the acquisition, Savage became the president of Humana’s Ohio market. Then, in 2005, a management restructuring saw him promoted to regional CEO, around which time Humana announced plans to dramatically expand its Cincinnati Service Center and bring more than 300 new jobs to the region.

There were roughly 600 Humana employees in Greater Cincinnati in 2006. Today, there are about 1,400 (1,200 downtown and 200 in West Chester). By 2010, the number is expected to grow to 1,900.

If there’s a “secret sauce” to growth, Savage attests, it’s having employees who truly buy into the company’s mission and feel empowered to innovate. “I often say, if we had everyone working in unison, we could turn this building sideways. The power of alignment is incredible,” he says.

At Choice Care, Savage started the practice of hanging large white sheets of paper around the office. Employees wrote down ideas and suggestions throughout the workday, then Savage and the other managers would collect and explore them.

“The people who are interacting with our customers day in and day out take our product and make it real,” Savage notes. And those are the people who need to drive the company’s policies and innovations, not people in boardrooms who have little contact with customers.

The difference in just talking about creativity and making it a company value is allowing employees to “run with the ball,” Ringel says. “We can talk about some emerging technology or some idea, and he’ll let me run off with it.”

One idea that Savage recently encouraged Ringel to pursue, for example, is the possibility of insurers paying for non-traditional benefits that contribute to cost savings; home improvements such as wheelchair ramps could enable some members to continue to live in their homes instead of in skilled nursing facilities.

“We have 1,400 minds here,” Savage says. “They have much more power than my one mind.”

A Center in Cincinnati

There was plenty of speculation that Humana would locate its new service center in Northern Kentucky, where Savage still lives. And it’s true that Humana received many offers to move out of the area.

However, Savage remained enthusiastic about staying downtown. The new Humana Center, with its glowing blue sign, was completed in 2008. It’s now a beacon to passersby on I-71.

Having lived in Greater Cincinnati for most of his life, Savage understands the area like very few people do, says van Amerongen, and he’s committed to the area’s success. Savage is involved in many local initiatives, such as the Family Nurturing Center, 3CDC, the New Way Foundation and the Kentucky Community and Technical College System. But his newest passion, unsurprisingly, deals with inspiring creativity.

Savage’s wife, Denise, passed away in February. She spent 30 years as an educator in the Boone County School System, and was active on the local board of Odyssey of the Mind, an international educational program in which students compete in creative problem solving. Savage recently finalized the paperwork for a foundation in her name to support the local arm of the program. His goal is to make sure it is fully funded.

Van Amerongen is thankful that Savage is leading Humana into healthcare’s “brave new world,” because he has seen Savage’s forward thinking and ability to adapt to new circumstances — both paramount in today’s quickly changing landscape.

The insurance industry does believe that reform is necessary, Savage emphasizes. The waste in today’s system is undeniable.

He mentions just a few ways the system could cut this waste, such as addressing the duplication of expensive medical services in the same service area and the high cost of medical litigation.

In Cincinnati, 14 hospitals offer open-heart surgery, when less than half of that number is actually necessary, he says. And doctors must spend exporbitant amounts on liability insurance, which drives up the cost of care for the rest of us.

But regardless of what happens in Washington, van Amerongen is confident that Savage will find a way to help Humana adapt.

“He understands that two, three, five years down the road, we’re going to be doing something very different than what we’re doing today,” van Amerongen says. “He’s always looking for the next step.”