Singing
the Blues

Bill Milnes found his niche at the St. Louis Blues

by Liz Schick

William R. Milnes Jr. left the world of corporate America for a career helping nonprofits adapt to a changing marketplace. It led him, in 1998, to take the helm of Blue Cross Blue Shield of Vermont.Bill Milnes didn’t always believe that big isn’t necessarily better. It took an encounter with the Blues to awaken him to that fact. 

“I like helping companies change in order to adapt to the changing marketplace,” says Milnes, president and chief executive officer for Blue Cross and Blue Shield of Vermont.  

Armed with a bachelor’s degree in accounting from the University of Missouri, Milnes went to work for Chrysler Corp. in his hometown of St. Louis until he joined the U.S. Marine Corps during the Vietnam era. Back in St. Louis, he used the GI Bill to earn his master of business administration with a major in finance. By then, Milnes had married. Knowing his future success at Chrysler would mean a move to Detroit — a move he did not want to make — Milnes joined Monsanto and they moved to Connecticut.

When Rebecca’s father had a health problem, the Milneses returned to St. Louis. Knowing Monsanto didn’t want him there, he interviewed at several corporations before finding a little company named Blue Cross and Blue Shield that wanted to hire him. He says he thought, “Oh, that’s nice. The Blues don’t move people around.” 

He found he liked working for a local, well-intended not-for-profit, and admired the fact that the company wanted to help the wellness of its community and be a good corporate citizen. 

Blue Cross and Blue Shield of Vermont employs 400 Vermonters. From left are Rosemeryl Harple, specialty nurse case manager; Deborah LaMoy, senior nurse case manager; Jean Meade, specialty nurse case manager; and Monika Moran, specialty nurse case manager.

He also found out that it didn’t have anywhere near the financial discipline of the corporate sector. “They didn’t know what cost accounting was,” Milnes says, “nor did they really do any budgeting. It was more of a discussion among all the executives as to how much they thought things were going to go up.”

He set out to build a proper cost-accounting department and budgeting system. “This experience showed me that I liked change, and I realized that, as health care providers were becoming more popular, the Blues were going to have to get bigger and become more businesslike in order to succeed.” 

Milnes had found his niche — one forged in St. Louis, certainly, but not exclusive to St. Louis, because while he was right that the Blues don’t move around, opportunities abound throughout the system.

That was the last time Milnes lived in St. Louis. From there, he worked in Ohio for 13 years, helping combine the Blue Cross Plan with a Blue Shield Plan so the hospital-only company and the doctor-only company could offer one-stop health-care shopping to their customers. Over the years, that company, which, at $800 million in assets, was about twice the size of the St. Louis operation, grew to $13 billion through mergers and consolidations. Among them was St. Louis.

“The chairman’s idea was to get bigger in scale in order to compete against other, national health care firms like Aetna or United,” says Milnes. “Today it is known as Wellpoint, and is the largest Blue in the United States, spread out over 14 states with 27 million members.” 

The Blues are independent organizations that have the use of the Blue Cross and Blue Shield trademarks through a national association with headquarters in Chicago. “When I joined there were probably 100 Blues,” he says. “Today there are only about 40. They are consolidating and getting bigger in order to adapt and change to the demands of today’s marketplace.”

In 1998, he received a call from Preston Jordan, president and chief executive officer of a struggling little Blue in Vermont. About to retire, Jordan wanted to introduce the board of directors to someone at a bigger company who had seen it through major changes. He told Milnes, “Bill, the Vermonters want a local voice and it’s a young company that you can really help to grow and succeed.”

The Vermont Blue had been formed in 1944, but was operationally consolidated with New Hampshire, and run from Concord. In the early 1980s a separate corporation was created solely for Vermont with a staff of 14 sales and employee relations people instate and administrative services provided by New Hampshire. By the late 1980s, New Hampshire was out of the picture. 

Now that the company is running smoothly, Milnes’ focus is on helping people understand there is a direct relationship between cost and benefit. Sean Murphy (left) is underwriting coordinator; Megan Peek is community relations and health education coordinator; and Stacy Lyons is audit business consultant.

It was a challenge for change Milnes couldn’t refuse, and in 1998, he took the reins of Blue Cross and Blue Shield of Vermont, one of the older Blue plans in the system but operationally the youngest, and smallest second only to Wyoming. 

 “I told the board that they were flying in the face of success, going independent in an industry that was consolidating,” says Milnes, whose former company was trying to get bigger and was already huge by Vermont standards. 

“I knew I could tell them what the pricing ought to be and how they should build the financial structure, but I didn’t know if the medicine wouldn’t kill us.” He thought that if the company survived the change, it could become a financially solvent Blue Cross Blue Shield company. 

The goal of the board was to stay independent and nonprofit, and to give local health care a voice in the process. Burlington knows what Burlington needs; so do Brattleboro and White River Junction, Milnes says. “I’ve spent eight years working to make the company financially strong enough to compete with the giants in the industry, and it is definitely holding its own.”  

Billi Gosh, a development consultant, a founder of the Vermont Women’s Fund and a former director of the Vermont Institute of Natural Science, who works with Milnes as a member of the board of directors, is delighted to know him. “He is a very inclusive leader. He keeps the board of directors absolutely informed about everything: what’s current as well as plans for the future.” 

With all the changes that have occurred since Milnes joined the company, he has had to make some tough decisions. “He doesn’t make them unilaterally,” Gosh says, “but he doesn’t shy away from them, either.” She finds Milnes “a very thorough and a very thoughtful person who is a superb listener and who cares deeply about others: his staff, the board, our customers, and the providers.” 

Milnes says he has learned that you don’t necessarily need to grow to have scale. “All you need to do is to partner with those who can add it. By determining what my company’s core competency is, I can partner with someone else to cover my weaknesses. By having one of the best Web specialists in the country build and maintain it, we can have one of the best Web sites of any Blue. 

We have the best national disease-management program vendor helping us design programs we can implement with our local know-how. Recognizing that chronic conditions like diabetes account for 70 percent of health care costs, we are designing intervention programs before crises arise and acute care has to be provided, also through a national vendor partnership. Our partners are hiring locally as well, so together we probably employ about 500 people.”

Now that the company is running smoothly, Milnes tries to focus most of his attention on the future and communicating it to others. He travels the state talking to everybody he can, from hospital staffs and insurance brokers to doctors and the public. “Part of my mission is to put healthcare into the context of how we are able to live better and longer lives so that people understand there is a direct relationship between cost and benefit.”   

This is one 60-year-old who practices what his health care organization preaches when it comes to exercise. When Milnes and Rebecca moved here, only the two youngest of their four children were living at home. They arrived in the summer and everybody loved it. Then came the snow. Milnes’ solution was to take all four of them to the ski school at Stowe for lessons. 

“I’m a bad downhill skier,” he says “but I love getting outside. I love crosscountry skiing. snowshoeing, trail hiking and walking the bike path at the lake with our Airedale, Molly.” 

The other thing Milnes really likes about living here is that driving is never boring, something not always true of driving in the flat Midwest. “I live in Williston, and on my drive to Berlin every day I go through three micro-climates. Yesterday, for example, it was cloudy and cold in Williston. Snow was blinding and piling up as I went through Richmond and Bolton, and on the far side of Waterbury the sun came out and the day was great. It’s always beautiful. I really love it.” 

He also admires the people who live here. “They are committed to Vermont. They are proud of what we can do in Vermont, and they want companies that are devoted to them. It continually recommits me to working with the board to create the best Vermont company possible.