Harvard Pilgrim is the biggest HMO in New England, and like most HMOs it has been losing money. Charles D. Baker is a conservative whiz kid who was Secretary of Administration and Finance under Governor Paul Cellucci, until Harvard Vanguard (an affiliate of Harvard Pilgrim) tapped him to take over, presumably with the expectation that Baker could use his influence with the state to staunch Harvard Pilgrim's financial hemorrhaging. That investment paid off when Baker, now the head of Harvard Pilgrim, was able to arrange a deal last week wherein the Massachusetts Health and Educational Facilities Authority paid Harvard Pilgrim $150 million for all of its real estate, which Harvard Pilgrim will now lease back from HEFA. This comes on the heels of a recent plan authorizing Harvard Pilgrim to borrow $90 million secured by its computer equipment (and you can imagine how valuable those computers will be in a year or two). So Harvard Pilgrim is now getting by with an extra $240 million essentially secured by the taxpayers. (Baker and Cellucci insist that this is not so, that the deal is "not a bailout," because the money for the real estate sale will be raised by HEFA from private investors, but it seems fairly certain that the state will have to help out if and when Harvard Pilgrim defaults.)
Baker, like Massachusetts Board of Education Chairman James Peyser, jumped from the Pioneer Institute think tank into state government, bringing with him the libertarian mantra that individuals and businesses should be allowed to fail -- no government intervention in the economy. His mantra appears to have changed since then.
Cellucci's interest in Leonardo DiCaprio came to light a few weeks ago. While announcing a new initiative to incorporate "values education" into public schools, he urged people to draw moral lessons from the film "Titanic."
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