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Abrupt Resignation Of Harvard Pilgrim CEO Will Have 'No Impact' On Talks With Partners HealthCare

The resignation letter, signed simply "Eric," stunned many employees of Harvard Pilgrim Health Care.

President and CEO Eric Schultz had been under investigation for at least three weeks, according to employees who spoke on background because they were not authorized by the company to speak on the matter. Several of those employees added that during that time, they had no reason to think the findings would force Schultz to leave.

But that wasn't the case.

"Regrettably, I recently exhibited behavior that was inconsistent with my personal core values and the company's core values and code of conduct," Schultz wrote in a letter, dated June 12, to his board and employees. "I made mistakes, and I'm truly sorry."

Harvard Pilgrim offered no further details about the conduct that triggered Schultz's resignation. Two of the employees who spoke on background said it's unlikely there will be any further fallout for the company as a result of Schultz's departure.

But his exit comes amid discussions that could lead to major changes for Massachusetts' second largest health insurer. In May, Harvard Pilgrim confirmed talks with Partners HealthCare that some participants expect will conclude in a merger. So, in addition to questions over Schultz' resignation, many who work in health care are wondering: What does his abrupt departure mean for the emerging affiliation?

Partners said talks are ongoing.

"This development will have no impact on our discussions with Partners HealthCare," said Harvard Pilgrim spokeswoman Joan Fallon. "Those talks are proceeding."

Michael Carson, who has been tapped by Harvard Pilgrim's board to replace Schultz as president, was not available for an interview. But colleagues said he has been more enthusiastic about talks with Partners than was Schultz.

The departing CEO may have been concerned about his role in any new entity. And while Schultz' expertise is a loss, and may make Harvard Pilgrim a little less appealing to Partners, his resignation eliminates the question about what would happen to the "other" CEO.

That question had become a bit of a distraction, according to several people close to the talks. They said the focus can remain now on assessing whether a merger or affiliation would be good for patients, as well as the two organizations.

Both companies are said to be working on those questions more internally at this stage before deciding whether to take a proposal to their respective boards.

Related:

Martha Bebinger Twitter Reporter
Martha Bebinger covers health care and other general assignments for WBUR.

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