Harvard Pilgrim reports strong Q2, despite CEO’s exit

Harvard Pilgrim Health Care reported net income of nearly $64 million in this year’s second quarter compared with net income of $1.6 million in the same period of 2017. Its year-to-date operating income was about $50 million on revenue of $1.6 billion, compared with an operating loss of $7.4 million on revenue of $1.5 billion in the first half of 2017.

Massachusetts’ second-largest health plan, with more than 1.2 million enrollees in Connecticut, Maine, Massachusetts and New Hampshire, reported revenue of nearly $832 million during the quarter, up 9.4% from $760 million in the second quarter of 2017. The health plan also drew operating income of $59.8 million during the quarter, compared with an operating loss of $1.9 million in the second quarter of 2017.

Harvard Pilgrim Chief Financial Officer Charley Goheen attributed the better-than-expected results to pharmacy cost management initiatives that have helped the plan keep its medical expenses in check.

The Wellesley, Mass.-based health plan’s longtime CEO, Eric Schultz, resigned in a June 12 letter to employees, admitting that he exhibited behavior that was inconsistent with his personal core values and the company’s code of conduct. Michael Carson, hired last year as the company’s chief business growth officer, is now in charge of the plan’s operations.

Harvard Pilgrim confirmed in May it was in talks with Massachusetts’ dominant health system, Partners HealthCare, over a possible merger. A spokeswoman told Modern Healthcare that Schultz’s resignation had no impact on its discussions with Partners.