Tufts and Harvard Pilgrim to merge, creating large nonprofit insurer

Harvard Pilgrim headquarters

Harvard Pilgrim Health Care and Tufts Health Plan have announced their intent to combine their nonprofit organizations.

The new organization, yet to be named, will become one of the largest nonprofit health services organizations in Massachusetts and the surrounding region.

Tom Croswell, president and CEO of Tufts Health Plan, will serve as CEO of the new organization. Michael Carson, who serves as president and CEO of Harvard Pilgrim Health Care, will serve as president and oversee the new organization's diverse business lines and subsidiaries.

The new organization will serve close to 2.4 million members in Massachusetts, Maine, Connecticut, New Hampshire and Rhode Island, offering employer-sponsored plans, Medicare and Medicaid plans, Qualified Health Plans and plans for those who are dually eligible for Medicare and Medicaid. 

WHY THIS MATTERS

The merger gives both insurers an integrated strength in an increasingly consolidated market, in an area dominated by the large Partners HealthCare system, which includes Massachusetts General and Brigham and Women's.

Last year, Harvard Pilgrim was in talks with Partners for what was called a potential collaboration, in a deal that did not go through. Financial statements at the time showed losses for Harvard Pilgrim for the previous two years. However, Harvard Pilgrim said recent second quarter results showed the company had exceeded financial expectations in net and operating income.

Partners' addition of Harvard Pilgrim would have created one of the largest integrated provider- and payer-based organizations in Massachusetts and beyond.

In 2015, Harvard Pilgrim Health Care joined forces with New Hampshire hospitals Dartmouth-Hitchcock, Elliot Health System and Frisbie Memorial to create analytics company Benevera Health. Benevera expanded to include St. Joseph Hospital, which is also in New Hampshire.

In making the Tufts announcement  Wednesday, Harvard Pilgrim said the two organizations share the same vision and that a combined organization would be even more effective, better able to keep high-quality healthcare accessible and affordable, and able to invest in programs and initiatives that enhance quality.

The new company will provide health coverage in all segments of the market regardless of a person's age, income, life circumstance or health status, Harvard Pilgrim said.

Improving affordability is expected through combined scale and administrative cost efficiencies, Harvard Pilgrim said.

THE LARGER TREND

Both Tufts Health Plan and Harvard Pilgrim Health Care have a history of supporting their communities. In 2018 alone, the two organizations' combined giving totaled more than $9 million.

Tufts Health Plan has more than 1.16 million members in Massachusetts, Rhode Island, Connecticut and New Hampshire.

Harvard Pilgrim Health Care, founded by doctors, has more than 3 million members.

ON THE RECORD

"Our communities and consumers today face four major hurdles in healthcare:  affordability, access, quality of health and a fragmented healthcare experience across various stakeholders and health systems. Through our shared vision, we believe we can tackle these issues and bring more value to the communities we serve," Croswell said.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com