Wednesday, August 15, 2018

Schultz’s Behavior

"In a sudden departure, Harvard Pilgrim CEO resigns amid questions about his behavior" by Priyanka Dayal McCluskey Globe Staff  June 12, 2018

The longtime leader of Harvard Pilgrim Health Care, the state’s second-largest commercial health insurer, abruptly resigned Tuesday for what the company said was behavior “inconsistent” with its values.

The company declined to specify what led to the departure of Eric H. Schultz, who had been chief executive and president of the Wellesley-based insurer since 2010, succeeding Charlie Baker.

Harvard Pilgrim did not respond to questions about his behavior, except saying that it occurred within the last few weeks. Schultz did not respond to a phone message Tuesday.

His sudden departure marks a stunning fall for a veteran executive who was well regarded in the business community. Colleagues in local health care circles expressed shock at his resignation.

The unexpected leadership change comes at a critical time for Harvard Pilgrim. The insurer has been negotiating a deal with Partners HealthCare, the state’s largest hospital network, which owns Massachusetts General and Brigham and Women’s hospitals, among others. The two companies have discussed a range of options, including an acquisition of Harvard Pilgrim by Partners.

Schultz had been a key player in those talks, telling the Globe just last month that he was eager to work with Partners to find “creative solutions” to improving patient care, while reining in costs.

Harvard Pilgrim and Partners each said Tuesday that Schultz’s resignation does not affect their discussions about a possible merger, but David E. Williams, a Boston health care consultant, predicted the leadership change at Harvard Pilgrim would slow any other major moves by the insurer.

“I think it reduces the chance that a deal will happen, especially in the near term,” Williams said. “The Harvard Pilgrim board can’t deal with two major things at once. Partners will want to wait and see if something else shakes out at Harvard Pilgrim.”

Harvard Pilgrim has struggled recently, posting an operating loss of $28.3 million in 2017 on revenue of $3 billion. That was an improvement from 2016, when it had an operating loss of $91.3 million.

High-ranking executives and officials in many different industries nationwide have lost their jobs in recent months over various allegations of sexual harassment during the growing #MeToo movement.

A Harvard Pilgrim spokeswoman did not comment when asked if Schultz’s behavior involved harassment or bullying.

Schultz led the Worcester-based insurer Fallon Health before he came to Harvard Pilgrim.

“It is surprising. I’ve always thought of Eric as a very upright and courteous and, I assumed, ethical person,” said Jon Kingsdale, a health care consultant who formerly held executive positions in state government and at Tufts Health Plan.

Kingsdale knows Schultz professionally but had no knowledge of the reasons for his resignation.

Harvard Pilgrim won an award from the Massachusetts Women’s Political Caucus last month for its hiring of many women and people from diverse backgrounds, including in leadership positions.....