At the Brink: How Harvard Pilgrim Got in Trouble

Publication Date: December 2000

Publisher: Center for Studying Health System Change

Author(s): Linda R. Brewster; Paul B. Ginsburg

Research Area: Health

Type: Brief

Abstract:

The Massachusetts insurance commissioner placed Harvard Pilgrim Health Care (HPHC) in receivership in January on the basis of large projected losses that put the nonprofit plan in a significant negative net worth position. Because Harvard Pilgrim was the largest health plan in the market, with substantial amounts payable to hospitals and physicians, its financial problems shook the Boston health care community. The story also attracted national attention because of the plan’s prominence and its reputation for quality. The Center for Studying Health System Change (HSC) followed the Harvard Pilgrim story closely as part of its continuous tracking of Boston—one of the 12 Community Tracking Study sites visited every two years— and is able to put this event in broader context. Many of Harvard Pilgrim’s problems are evident in plans elsewhere. This Issue Brief discusses the causes of the plan’s financial problem and the state’s response, which has preserved the organization.