For example, Tufts Health Plan sponsored a devilishly clever ''product'' for senior citizens called Secure Horizons. This Medicare HMO plan offered senior citizens a prepaid plan slightly more generous than conventional Medicare, but without prescription drug benefits. This strategy deliberately attracted relatively healthy old people, since elderly people who are heavily reliant on prescription drugs tend to buy plans with drug benefits. While Tufts was enrolling a disproportionate share of healthy seniors, Harvard Pilgrim was stuck with an older and sicker population. In addition, Harvard Pilgrim's strategy of contracting with hundreds of different medical groups to give subscribers a wider choice left it with a management and accounting nightmare.
Most observers expect government to come up with some kind of bailout.
Harvard Pilgrim is a victim of a marketplace that emphasizes price over quality,'' says Dr. Arnold Relman, former editor of the New England Journal of Medicine and author of a forthcoming book on medicine and markets. Indeed, the ideal of managed care, in the constructive sense as practiced by Harvard Community Health Plan, is too expensive for today's cost-conscious marketplace. In this topsy-turvy system, more and more money is being spent on marketing and less and less on care. Instead of having one large pool, in which the premiums paid by the well subsidize the medical care of the sick, insurance companies following market principles seek to avoid insuring or treating sick people. It is a sign of the sickness of the system that relatively ethical plans go under.