New PPO to replace Harvard Pilgrim

Boston University announced this week that it will replace its largest health-care provider, Harvard Pilgrim, on May 1 with a new health plan designed especially for its employees. The plan, called Bostonia Advantage, was developed after President Jon Westling directed administrators to review the University's health plan offerings late last year in light of the financial difficulties of Harvard Pilgrim and the rising trend for health plan premiums.

"Everyone knows that health care in Massachusetts and elsewhere is undergoing major changes, and in many cases, financial difficulties," says Manuel Monteiro, assistant vice president of human resources. "Our goal in undertaking this initiative is to continue to be able to provide our employees with the highest quality health-care benefits at affordable prices and with a full array of choices."

The new plan, which is a preferred provider organization (PPO), will use the Health Care Value Management (HCVM) network of caregivers, which has almost the same network used by Harvard Pilgrim. Ninety-eight percent of BU employees now covered by Harvard Pilgrim will be able to use their current doctor and hospital under the plan, according to Monteiro. The plan includes all 14 Harvard Vanguard Health Centers as well as 162 hospitals and 30,000 physicians in the New England area. The new plan will be administered by North American Health Plans, one of the largest plan administrators in the country.

"After a careful assessment, we found that the University can save itself and its employees a combined $2 million next year by putting itself in the driver's seat," says Monteiro. "We have contracted with experienced partners who will provide the components that make up a top-notch health-care organization."

The decision to drop Harvard Pilgrim was based on the company's decision last fall to boost BU's premium rate by 14 percent as of May 1, as well as the company's well-reported financial woes, according to Monteiro. Harvard Pilgrim was placed in receivership in January, and the state now is heavily involved in managing Harvard Pilgrim's $226 million debt.

"The increase Harvard Pilgrim was talking about would have meant a jump in the amount an employee would pay from $194.18 per month to $220.20 per month for family coverage," says Monteiro. "That was unacceptable." Employees pay 34 percent of the cost of health-care premiums, and BU pays 66 percent.

Under the new BU plan, employees will see a 4.6 percent increase in premiums in the coming year. Copayments for exams and prescription drugs will rise by $5, bringing them in line with the typical costs for these services elsewhere, according to Monteiro. Bostonia Advantage will also offer chiropractic coverage, which was unavailable under the Harvard Pilgrim HMO and PPO, and it will cover 25 mental health visits, five more than with Harvard Pilgrim.

"In making this decision, we also had to bear in mind that Harvard Pilgrim is short on cash," says BU Senior Vice President Richard Towle. "It will have to raise premiums and possibly make cost-cutting measures that may impinge on the quality of services. There is no need for BU to ride out this cycle when the University can replicate the benefits itself."

In the upcoming annual open enrollment period that extends from April 3 to 28, BU employees will have four health plans from which to choose: Bostonia Advantage, Blue Choice New England, Boston Medical Center Preferred, and the Network Blue New England (HMO Blue). Blue Cross/Blue Shield Comprehensive Major Medical and Tufts HMO members may continue with those plans, but no new members may join.

"The incentive for employees to enroll in these new plans is for them to keep the model of care to which they have become accustomed," says Monteiro. "It's essentially a full replacement model -- same doctors, same specialists, same hospitals.

"The partners the University has chosen to provide the Bostonia Advantage plan benefits are established, reputable companies, and many of them already work together," he continues. "The business model for the Bostonia Advantage PPO is one that has been used by many local employers and unions."

A letter from BU President Jon Westling explaining the health-care changes was mailed to employees on March 22. They will also receive letters and open enrollment materials from the Office of Personnel during the next two weeks. The University will arrange a series of employee meetings to present the options and to answer questions throughout the month of April. In addition, a special enrollment Web site will be established to provide information about health-care options and to link to provider sites.

"We're looking at this as a major change," says Monteiro. "We want to go through all of the right steps to provide our employees with the information they need to make informed choices."