Matthew Thornton Health Plan has been left at the altar again, but maybe not for long. After two years of on-and-off negotiations with Brookline, Mass.-based Harvard Pilgrim Health Care, both HMOs said last week that they were parting amicably after agreeing they could not "achieve a workable arrangement."
In December, Harvard Pilgrim agreed to buy Bedford, N.H.-based Matthew Thornton for about $75 million. That deal came after the board of Dartmouth Hitchcock Medical Center, which owns Matthew Thornton, nixed a previous deal between the two HMOs last year.
Now that 1.2 million-enrollee Harvard Pilgrim, New England's largest HMO, has bowed out for good, other suitors for Matthew Thornton are starting to circle. Matthew Thornton executives said they will review the many serious partnership inquiries the plan received last week.
With 155,000 enrollees, Matthew Thornton is New Hampshire's second-largest HMO behind Healthsource, which recently was acquired by Cigna Corp.
Through its third quarter ended March 31, Matthew Thornton had a loss of $7.2 million on revenues of $147.9 million, according to the most recent filings with the New Hampshire Insurance Department. That may depress the HMO's valuation if it puts itself back on the market.
"Everyone understands something has to happen; they just can't stand still," said Harris Berman, M.D., chief executive officer at Tufts Health Plan, Waltham, Mass. Berman, a co-founder of Matthew Thornton 26 years ago, said Tufts "would certainly be interested" in a deal and is monitoring the situation. Last year Harvard Pilgrim beat out Tufts for Matthew Thornton.
Likewise, New Hampshire Blue Cross and Blue Shield, another spurned suitor, remains an interested buyer. "Our offer is still on the table," said Clark Dumont, spokesman for the New Hampshire Blues.
Matthew Thornton executives were unavailable to comment. A spokeswoman said the HMO's executives were reviewing a number of options that "could include a partnership with another HMO."
In a statement, Matthew Thornton board Chairman Charles J. Simons said: "We believed strongly Harvard was the right partner and that this time we would be successful in joining."
A high-level executive departure further clouds Matthew Thornton's future. The HMO said its president, Everett Page, has resigned. Michael Autrey, a consultant from the Pace Group, will serve as interim president. A Matthew Thornton spokeswoman emphasized that Page's decision to step down was unrelated to the collapse of the Harvard Pilgrim deal.
Representatives for both HMOs declined to provide details on what stumbling blocks tripped up the purchase.