Harvard Pilgrim and Tufts are merging. Here’s why it doesn’t really matter

Hail to the Chief! Tom Croswell is slated to lead the combined Tufts/Harvard health plan

Harvard Pilgrim and Tufts –the second and third largest health plans in Massachusetts–  are merging.  It deserves the front page treatment it’s receiving today (check out the comprehensive coverage in the Boston Globe) –and will have an impact on employees and members– but I predict that the long term impact on Massachusetts healthcare overall will be modest at best.

To boil it down, despite being ranked by NCQA as the top two health plans in the whole country for many years (here’s 2014 for example), it’s been a long time since either Harvard or Tufts had a major influence in the local market. That’s harsh but I don’t think I’m overstating things.

In 2001 when I was setting up my business and looking for health insurance, I asked around about which insurer to use. My doctors said they were indifferent, but a friend at Partners Health Care told me Blue Cross was the only plan they paid attention to.

The last time Tufts tried to seriously impact the market was about 20 years ago, when Partners HealthCare manhandled them in rate negotiations.  And former Harvard Pilgrim CEO, Charlie Baker admitted publicly around the early aughts that when Harvard Pilgrim tried innovative reimbursement structures, hospitals just ignored them and converted everything into Medicare equivalents. And clearly the attempt to channel volume to community hospitals and away from Partners was a bust.

At least in Baker’s current job as Governor he has some influence.

I don’t mean to be cynical at all. I’ve followed both of these mission-driven companies for many years and would love the new combined entity to be an influential innovator –not just in holding down costs but in radically improving experience and quality as well.

But after so many years of banging their heads against the wall, will they give it another go? I kind of doubt it. As the number 2 player in an insurance market led by Blue Cross Blue Shield, and a healthcare market dominated at the Massachusetts level by Partners and BI/Lahey and overall by the federal and state governments, I see their role mainly around the margins. I’m not sure their leadership is ready to go all out to change the system either.

In the last several years, under CEO Andrew Dreyfus, Blue Cross has actually passed Harvard Pilgrim and Tufts in the NCQA ratings. It’s been more innovative as well, with the Alternative Quality Contract (AQC) in particular.

I looked back this morning at my blog coverage of these companies over the years and picked out some highlights.

I’ve interviewed the CEOs of all three:

  • Tom Croswell, who will head the combined entity and is currently CEO of Tufts (2018)
  • Eric Schultz, then CEO of Harvard Pilgrim in a four-part video series in 2011 and again in a podcast in 2013
  • Charlie Baker, when he was running for Governor in 2014. (I interviewed every candidate that year)
  • Andrew Dreyfus, CEO of Blue Cross Blue Shield in 2012

In my coverage (which is by no means comprehensive) I found a few examples of Harvard Pilgrim and Tufts trying to make waves in the market.

There’s much more to say, of course, but I do wish the new entity luck! Massachusetts can use all the help it can get.


By healthcare business consultant David E. Williams, president of Health Business Group.

August 15, 2019

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