Harvard Pilgrim Health Care and Tufts Health Plan Announce Decision to Remain Independent Companies

Exploration of Proposed Merger Ceases

BOSTON--(BUSINESS WIRE)-- The Board of Directors of Harvard Pilgrim Health Care and Tufts Health Plan today announced that they will not pursue a merger of the two non-profit health plans. On January 25, 2011, Harvard Pilgrim and Tufts Health Plan signed a non-binding Memorandum of Understanding (MOU) as the first step in exploring a possible merger of the organizations. The MOU authorized a due diligence period for both organizations to internally review the merits of a potential transaction.

“We have spent the last six weeks in a vigorous process thoughtfully exploring the practical feasibility of combining our two organizations for the benefit of our customers, members and the many other people we aim to serve. As a result of this process, we have now determined that we are stronger as individual competitors than one company,” said Eric Schultz, president and chief executive officer of Harvard Pilgrim Health Care. “Both organizations will continue their work to keep high quality health care accessible and affordable, while at the same time investing in community programs and initiatives.”

During the due diligence period it became apparent that the savings and efficiencies both organizations were seeking would be more complex to achieve than initially envisioned and the integration of the two organizations would be more costly and time-consuming than anticipated when discussions first began.

“The due diligence process provided us with the opportunity to carefully explore whether our organizations are operationally compatible. We made the thoughtful determination that while we are in the same business, our operations are very different and, in many important aspects, not fully compatible without significant changes to existing processes and applications,” said James Roosevelt, Jr., president and chief executive officer of Tufts Health Plan. “Based on the information we have received in the due diligence process, we now believe this decision is in the best interest of those we serve: our members and customers. We walk away from these discussions with great respect for the leadership at Harvard Pilgrim and remain respectful competitors in the Massachusetts market.”

The two organizations are the highest ranking health plans in the nation for customer service and quality. As the #1 ranked health plan, Harvard Pilgrim Health Care operates in Massachusetts, Maine and New Hampshire; while Tufts Health Plan, ranked #2, operates in Massachusetts and Rhode Island.

Harvard Pilgrim Health Care

Harvard Pilgrim is a not-for-profit health plan that provides a variety of insurance plan options and self-funding arrangements to more than one million members in Massachusetts, New Hampshire and Maine. Harvard Pilgrim was recently ranked the #1 private health plan in America again according to an annual ranking of the nation’s best health plans by the National Committee for Quality Assurance (NCQA).* Harvard Pilgrim is the only private health plan in the nation to be named #1 for member satisfaction and quality of care for seven consecutive years.** In addition, for the second year in a row, Harvard Pilgrim is the highest-ranked health insurance plan in the New England region in the J.D. Power and Associates 2010 National Health Insurance Plan Study.SM ***Harvard Pilgrim provides innovative approaches to health improvement and disease management, unique online tools that speed and simplify key transactions for employers and providers, and personalized health support at www.harvardpilgrim.org.

NCQA’s Health Insurance Plan Rankings 2010-11 – Private** U.S. News/NCQA America’s Best Health Insurance Plans 2005-2009 (annual). America’s Best Health Insurance Plans is a trademark of U.S. News & World Report. NCQA The State of Health Care Quality 2004*** J.D. Power and Associates 2010 National Health Insurance Plan Study SM .examined the member satisfaction performance of 133 health plan companies in 17 geographic regions. The study surveyed Harvard Pilgrim’s members throughout New England, including members in the health plans’ growing suite of consumer-driven health plans. For more information please visit jdpower.com

Tufts Health Plan

Headquartered in Massachusetts, with membership in that state and Rhode Island, Tufts Health Plan, a nonprofit organization, is nationally recognized for its commitment to providing innovative, high-quality health care coverage to its members. The plan supports its members and employers with an array of physician-led health management programs that use evidence-based medicine to design coverage that supports proven approaches to providing care and improving quality. Tufts Health Plan’s HMO and POS are ranked second in the nation, and its Medicare Advantage program is ranked seventh in the nation, by the National Committee for Quality Assurance (NCQA). Since 1999, those products also achieved Excellent accreditation status from NCQA, the highest possible achievement for consumer protection, quality improvement and clinical effectiveness. More information about the organization is available on its Web site www.tuftshealthplan.com.



CONTACT:

Harvard Pilgrim Health Care
Sharon Torgerson, 617-509-7458
[email protected]
or
Tufts Health Plan
Patti Embry-Tautenhan, 617-972-1090
[email protected]
or
Rasky Baerlein Strategic Communications
Larry Rasky, 617-443-4773
[email protected]

KEYWORDS:   United States  North America  Massachusetts

INDUSTRY KEYWORDS:   Health  Professional Services  Insurance  General Health  Managed Care

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