Baystate Health System and Harvard Pilgrim Health Care Announce Joint Venture.

SPRINGFIELD, Mass.--(BW HealthWire)--July 14, 1998--Baystate Health System (BHS) and Harvard Pilgrim Health Care (HPHC) announced today that they have completed an agreement to form a unique partnership that will own and operate Health New England (HNE) and support Harvard Pilgrim's managed care products in Western Massachusetts. Leaders of the organizations said their agreement demonstrates that hospitals, physicians and managed care health plans can collaborate effectively around their common interests in improving the quality, availability and affordability of health care.

Under terms of the agreement, Baystate has sold one half of its shares of Health New England to Harvard Pilgrim and the two have created a new joint venture that will operate from Health New England's offices at Monarch Place in downtown Springfield. The partnership will have no immediate effect on the care or coverage of members of Health New England and Harvard Pilgrim.

BHS and affiliated physicians created Health New England in 1985 as a locally based health maintenance organization to serve the people of Western Massachusetts and the surrounding area. In 1997, Baystate purchased the majority ownership of HNE, with approximately five percent owned by affiliated physicians. The joint venture will coordinate HNE and Harvard Pilgrim managed care products in Western Massachusetts.

Michael J. Daly, president of BHS, said the joint venture with Harvard Pilgrim is a key part of Baystate's integrated delivery system. He added, "Our strategy is to link hospitals, physicians, home health services and other providers of care with organizations that manage care, to provide a complete spectrum of health services to the community."

Allan Greenberg, president and chief executive officer of Harvard Pilgrim, said, "Harvard Pilgrim is dedicated to providing community based care. Our joint venture with Baystate will enable us to work with area physicians, employers and members at a level that reflects our partnership and commitment."

Peter Straley, president of Health New England, said the joint venture will have a positive impact on local communities. He added, "It will allow our organizations to align our efforts in the development of unique products, tailored specifically to the needs of employers and residents of our region, to help them to obtain the highest quality health care at affordable prices."

Baystate Health System is the largest health care delivery system in Western Massachusetts. It is the parent corporation of Baystate Medical Center in Springfield, Franklin Medical Center in Greenfield and Mary Lane Hospital in Ware, the Visiting Nurse Association and Hospice of Western New England, nearly twenty primary care practice sites in Hampden, Hampshire and Franklin Counties and a number of other health related companies and affiliated organizations.

Harvard Pilgrim Health Care is the largest not-for-profit health plan in New England. In 1997, Newsweek and U.S. News and World Report rated it among the best HMOs in the nation. It has full, three year accreditation from the National Committee for Quality Assurance, an independent organization dedicated to assessing and reporting on the quality of managed care. HPHC has been affiliated with physicians and hospitals in the Berkshires for more than ten years and last year it began offering its Medicare risk product, "First Seniority," in Western Massachusetts. Harvard Pilgrim serves more than 1.3 million members in Massachusetts, Rhode Island, Maine and New Hampshire.

    CONTACT: Baystate Health System
              David J. Lorenzatti, 413/784-4111
                          or
              Harvard Pilgrim Health Care
              Patti Embry-Tautenhan, 617/731-7413