The top executive at Harvard Pilgrim Health Care, Alan Greenberg, abruptly resigned last week, just days after the Brookline, Mass.-based managed-care organization posted a $94 million operating loss for 1998.
After adding investment income, the company lost $54 million. It was the first ever net loss for the not-for-profit, 1.3 million-enrollee HMO.
A spokesman for Harvard Pilgrim declined to give details about the May 6 resignation, which was effective immediately.
"It is a private matter between Alan Greenberg and the board of directors, and we're not going to discuss it further," said spokesman Alan Raymond.
But the audited financial results for 1998, released April 30, showed that the mismatch of premium revenues to medical and administrative expenses was higher than anticipated, Raymond said. "We basically underpriced (premiums) in the market in 1998 because we were overly optimistic about expenses," he said.
Greenberg, 46, took the helm in 1996 as competition for enrollees intensified in Massachusetts and other New England states in which Harvard Pilgrim operates.
During his three years as chief executive officer, premiums barely increased or stayed flat as the HMO competed for market share in heavily contested Massachusetts and Rhode Island, Raymond said.
Last November, Harvard Pilgrim announced layoffs following a report estimating 1998 losses at $30 million.