Harvard Responds to State's Suit Over HMO's Use of Name

A day after the state of Massachusetts filed suit against the University to protect the use of the "Harvard" name in Harvard Pilgrim Health Care (HPHC), University officials defended their right to control the use of the name.

After Mass. Attorney General Thomas F. Reilly said Wednesday that Harvard's actions "placed a cloud" over the HPHC rehabilitation, University officials said they had no intent to derail the process.

"The University is prepared to be flexible and supportive," said Paul S. Grogan, vice president for government, community and public affairs. "We do not have a financial motive. We do have an obligation to protect the good name of the University."

Harvard spokesperson Joe Wrinn said that the University raised the issue before a final plan had been developed so its concerns could be addressed constructively and not become a deal-breaker.

"We want it crystal clear that we control our name," Wrinn said. "We don't want to complicate matters at the end."

Grogan added that the state's suit would have no effect on Harvard's ultimate decision on investing in HPHC, an option first proposed by the state.

"That's really a separate matter," said Grogan. He added that Harvard will not invest in HPHC without the state offering some method of risk mitigation, which the state has not yet promised.

HPHC, a health maintenance organization (HMO) serving 1.1 million members in Massachusetts, came under state control in early January after it encountered nearly $200 million in losses last year. The state is currently looking for a way to restore the company to financial health.

The state filed suit in Supreme Judicial Court for Suffolk County in response to a Feb. 18 letter from Provost Harvey V. Fineberg '67, stating that Harvard "asserts rights to the use of its name by Harvard Pilgrim."

Wrinn said that the lawsuit came as a surprise to the University, which had hoped to enter a dialogue with the state on the issue.

State officials, however, said that the filing of the lawsuit does not preclude such a conversation with the University.

"We're open to any discussions the University cares to have on this matter," said Stephen M. Bilafer '88, a spokesperson for the state Attorney General's Office.

Grogan said the University would have more concern about the use of Harvard's name if the rehabilitation of HPHC--currently a nonprofit firm--makes it a for-profit company. However, he said that the University was not necessarily opposed to the use of the Harvard name in HPHC even if it does become for-profit.

Both Grogan and Wrinn said the University is particularly concerned about the possibility of HPHC entering into new lines of business or spinning off units unrelated to its current core business. Such new units could directly compete with an institution of the University.

Wrinn said that if Harvard does not assert the right to its name, there is the potential that it could have to ask HPHC for permission to use the Harvard name if it wanted to enter a field in competition to the plan.

According to Grogan, the University has special interest in the HPHC name because of the University's presence in various health fields. He added that this case differs from other industries--such as restaurants--in which the University is not involved and thus does not challenge the use of its name.