Harvard Pilgrim Health Care drew significantly higher net income in the second quarter of 2018, which ended just weeks after its CEO resigned abruptly, compared with the same period in 2017.
Massachusetts' second-largest health plan, with more than 1.2 million enrollees in Connecticut, Maine, Massachusetts and New Hampshire, reported $63.6 million in net income during the second quarter of 2018, which ended June 30, compared with $1.6 million during the prior-year period.
Wellesley, Mass.-based Harvard Pilgrim's revenue was 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's 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. He said in a statement that Harvard Pilgrim continues to see favorable results in each of its markets, with fully insured growth in Massachusetts, higher than expected revenue in its self-insured market and a strong commitment to Maine's individual market, which has performed better than expected.
"Our goal is to continue to offer innovative products, ensure our prices are competitive, and grow profitably in the future with ongoing improvements to our superior member experience," Goheen said.
Harvard Pilgrim's total membership was 1,226,379 during the second quarter of 2018, down slightly from 1,247,030 during the same time in 2017.
The health plan's longtime CEO, Eric Schultz, announced his resignation 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 Schultz's resignation had no impact on its discussions with Partners.
Year-to-date, the health plan reported net income of nearly $64 million, compared with a net loss of $3.1 million for 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.
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