The losses incurred by Harvard Pilgrim Health Care last year have swelled to $197 million, according to the latest figures released by Massachusetts authorities, who placed the Brookline, Mass.-based HMO in receivership last month
At that time the plan's 1999 losses were estimated at $177 million.
Massachusetts authorities supervising Harvard Pilgrim's recovery have floated the idea that hospitals and other potential investors might buy "surplus notes" to refinance the ailing health plan.
The Massachusetts attorney general's office and investment bank Salomon Smith Barney said the health plan needs $225 million to pay past-due obligations, of which $175 million could come from hospitals and other investors.
But hospitals are holding about $265 million in past-due receivables from Harvard Pilgrim. Physicians are holding an undetermined amount in receivables. No one can say whether or how the bills will be paid. And that, according to two credit-rating agencies, could affect the hospitals' bond ratings (See Finance, p. 64).