The Name Game Can Wait

Harvard Pilgrim Health Care (HPHC), the ailing health maintenance organization, is still weighing heavily on the hands of state officials. As of yet, there has been no plan announced for HPHC's bailout. Further complicating matters this week, the state and the University are now embroiled in a lawsuit over the HMO's right to the Harvard brand name. Although this quibbling points to legitimate concerns on both sides, it would be a shame if it ultimately interfered with HPHC's bailout and non-profit future.

The state is understandably concerned with the prospect of losing the Harvard brand name. HPHC, which has 1.1 million members, has built a formidable reputation on the name it has used since 1969. Furthermore, the threat that the HMO will no longer operate under the Harvard name could scare away potential investors. In the state's suit against the University, Attorney General Thomas F. Reilly has asserted that giving up the Harvard name would cause HPHC to lose investors, status and important name recognition. On the University side, HPHC and Harvard are both in the medical field. Should the HMO become a for-profit organization, it might begin entering into new lines of business that would directly compete with the University.

Nevertheless, both parties could have dealt with the name issue without jeopardizing the already fragile bailout talks. Instead of sending a terse letter to the state asserting Harvard's right to the use of its name, Provost Harvey V. Fineberg '67 could have found a more tactful way of bringing the issue to the table--perhaps after HPHC's future was a little more secure. Similarly, one wonders whether legal recourse was the only option available to the state.

But in the end, the damage has already been done. The lawsuit has already diverted attention away from the HMO's urgent financial needs. Harvard is seen as one of the key players needed to revive HPHC; without its support it may be sold to a for-profit HMO--a conclusion that neither the University nor the state would look favorably upon. By pushing the state on the name issue, Harvard makes the for-profit option more attractive to state officials who have been trying to bring together investors since early January. Harvard's intransigence on this issue could easily lead to what it fears most--the takeover of HPHC by a for-profit HMO which then competes against Harvard directly in the medical field using Harvard's name.

Paul S. Grogan, the University's vice president for government, community and public affairs, has said that the name issue is separate from the issue of investment and that this matter should not affect the University's decision whether or not to support HPHC. However, the University won't invest in HPHC unless there is some security provided by the state, and the state has not yet guaranteed this security. A contentious lawsuit over the name will hinder the conversations that are necessary to work out an investment agreement.

HPHC is not the only HMO that has been facing financial losses this year, but it is the only one which has been put in state receivership. The other institutions expect to see a turnaround in their finances during the fiscal year 2000, something HPHC predicts if it receives the necessary infusion of cash. The longer the HMO remains in state receivership, the slower its eventual recovery will be.

Harvard needs to do everything it can to reassure the state that its interests in protecting its name are secondary to the long-term welfare of HPHC. This might even include relinquishing some control of the Harvard name, provided HPHC's non-profit future is guaranteed. If there is to be any hope of salvaging HPHC, both the state and the University must quickly resolve this needless fight over nomenclature.