When Patrick Gilligan was interviewing for the top job at Point32Health earlier this year, he knew the nonprofit insurer was struggling. But Mr. Gilligan, a 30-year industry veteran who has worked on both sides of the payer-provider divide, saw something else: the potential collapse of meaningful competition in New England’s health insurance market.
“I have been on the health plan side for a long time in my career, and I’ve seen markets where you get down to three or even just two payers, and it’s really bad for the market,” he told Becker’s. “It’s bad for employers. It’s bad for brokers. You have no innovation, you have no differentiation, and you just swap market share. It’s bad for healthcare.”
That assessment drove him to accept the role as president and CEO of Point32Health, the parent company of Harvard Pilgrim Health Care and Tufts Health Plan. Now nearly six months into the job, Mr. Gilligan is leading one of New England’s largest nonprofit health plans, with roughly 2 million members across Massachusetts, Rhode Island, Connecticut, New Hampshire and Maine, through what he describes as a period of necessary transformation.
The stakes are high. A recent analyst report found that 80% of the roughly 80 regional nonprofit health plans examined are at risk of bankruptcy within the next few years. For independent regional plans of Point32Health’s size and scope, Mr. Gilligan said there may only be five or six left in the country.
A dual-lens perspective
Mr. Gilligan’s path to Point32Health runs through both sides of the healthcare industry. He previously served as chief commercial officer at Blue Cross Blue Shield of Massachusetts. Before that, he held leadership roles at CVS Health, developing partnerships with more than 60 health systems to advance care delivery through MinuteClinic. He also spent time at Partners HealthCare, now Mass General Brigham, working on payer contracting and financial strategy.
He shared that experience on both sides of the table informs his current outlook on one of the industry’s most persistent challenges: the friction between payers and providers. He’s publicly described the post-COVID era as one where both sides have retreated to their corners, a characterization he said drew mixed reactions.
“I’ve gotten a little feedback on that comment about the parties going to their corners, some with avid agreement and some saying it was an unfair characterization,” he said. “What I mean by that is deals are still getting done. Plans are talking to hospital systems. Hospital systems are talking to plans.”
But the risk-sharing arrangements that were more common before the pandemic, he said, have largely disappeared and haven’t come back.
“Prior to the pandemic, there were many more risk-sharing agreements, both in commercial and in Medicare Advantage, between health plans and providers,” Mr. Gilligan said. “The providers couldn’t focus on that during the pandemic, and it kind of filtered away.”
The employer squeeze
While much of the public debate around healthcare costs focuses on the relationships between insurers and hospitals, Mr. Gilligan argues the conversation is missing a critical voice: the employers who actually pay the premiums.
“The increases we gave out for Jan. 1 ranged from 11% to 40%, and it’s just not sustainable,” he said.
He pointed to a dynamic that has long shaped healthcare economics but is now reaching a breaking point. Medicare and Medicaid reimbursements consistently fall short of covering provider cost increases, leaving commercial payers, and by extension employers, to make up the difference.
“The reality is, year over year, those two programs do not cover the cost increases for the providers. They come in lower than that,” Mr. Gilligan said. “So the providers then turn and charge employers the full inflation plus the gap in the other inflation. That just can’t continue anymore. We need to support the voice of employers, because the cross-subsidization has just gotten to be way too high, and it’s out of whack.”
He said Point32Health is working to reduce its own administrative costs while also pursuing medical and pharmacy cost management strategies it had previously been slower to adopt than competitors. But he sees a bigger opportunity is a return to aligned incentives with providers.
“I’ve been in this business 30 years, and the estimates of waste in healthcare haven’t changed. Twenty-five to 30% is waste, and we need to come together and address that,” he said. “We just can’t have a single conversation of ‘what’s my rate increase going to be’ and continue on the fee-for-service treadmill that we’re on. It’s not going to work.”
Staying in the fight
Amid an uncertain policy environment, with enhanced ACA tax credits expected to expire and Medicaid changes looming in 2027, Mr. Gilligan said he’s heard growing anxiety from other industry leaders. But he pushed back on what he characterized as a “doomsday” outlook for the industry.
“I think now’s the time to certainly be critical of policies that are coming out of government and advocate for what’s best for patients, but it’s also a time to roll up our sleeves and to think about a better healthcare system and how we make that happen.”
One example of that is Point32Health’s newly expanded partnership with Brewer, Maine-based Northern Light Health to grow marketplace access in rural areas of the state.
“I don’t have to worry about shareholders,” Mr. Gilligan said. “I don’t have to worry about a hospital system that owns me as a health plan. We view it, and we talk about it, as if we’re owned by the members and the customers and the communities we serve.”
In 2024, the Point32Health Foundation contributed $14 million to community organizations through grants, matching gifts, sponsorships and volunteer efforts.
“People understand what we do, that affordability is important in healthcare, that access is important and quality is important,” he said. “We believe that we play an important role. It does not downplay the physician-patient relationship. We understand that that is number one and very important. But at the same time, healthcare is very difficult to navigate, and we can be really helpful in getting access.”
Six months into the job, Mr. Gilligan isn’t predicting an easy road ahead. But he’s betting that more collaboration with providers, employers and the communities his company serves offers a better path than the alternative.
“I really do think there’s a win-win-win in there,” he said. “Provider, plan and employer.”
