Charlie Baker and the exit from Rhode Island

The Boston Globe has a lengthy front page story on Charlie Baker today, focusing on his decision as CEO of Harvard Pilgrim to pull out of the Rhode Island market (To Baker, R.I. pullout was right move). It’s a pretty thorough and balanced piece and definitely worth a read if you’re a Massachusetts voter trying to decide who our next Governor should be.

In December 1999, an ailing Harvard Pilgrim Health Care pulled out of Rhode Island with two months’ notice, shuttering the company’s three health centers there and forcing 1,200 physicians and other employees to search for new jobs. Thousands of patients suddenly had to find new doctors, and about 128,000 subscribers scrambled for other health insurance.

The Ocean State accounted for about 10 percent of Harvard Pilgrim’s customers but 45 percent of its losses, and to save the company, new chief executive Charles D. Baker essentially cut off its Rhode Island leg.

Personally, I think the withdrawal from Rhode Island was necessary and a good, decisive move by Baker, even if it caused pain there. The alternative would have been a lot more pain in Harvard Pilgrim’s home market of Massachusetts if the company collapsed.

Baker didn’t initiate the move into Rhode Island but he did do a good job of unwinding a number of bad decisions including that one.

If I remember correctly, Harvard and its competitor, Tufts Health Plan had both expanded into neighboring states including Rhode Island, New Hampshire and Maine and both ended up pulling out of those markets after big losses.

So in the end it was less about Charlier Baker and more about what anyone competent would have had to do to respond to the circumstances.

I’m undecided on the Governor’s race, but I do think Baker’s health plan leadership experience is a plus.

September 29, 2010

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