scorecardresearch Skip to main content

Neighborhood Health Plan seeking to gain business customers

David Segal, chief executive of the struggling Neighborhood Health Plan, wants to turn its finances around.Lane Turner/Globe Staff

Neighborhood Health Plan is looking to move into a new neighborhood.

The nonprofit insurer, best known for managing the care of low-income people on Medicaid, is accelerating a push into the market for large businesses.

The expansion plan is part of an effort by the company, an arm of Partners HealthCare, to rebuild its finances after losing more than $100 million last year.

The deficit was caused by a surge of sick new patients, the costs of an expensive new hepatitis C drug, and reimbursements from the state that health plan executives said failed to match costs. Neighborhood Health executives say the insurer is receiving higher reimbursements this year, and fewer patients are using costly drugs and medical treatments.


One of Neighborhood Health’s biggest selling points is that its network includes most of Partners’ 6,000 doctors and all of its 10 hospitals, among them Massachusetts General and Brigham and Women’s in Boston. But it is up against bigger insurers such as Blue Cross Blue Shield of Massachusetts and Harvard Pilgrim Health Care that already have a large presence among businesses.

Nevertheless, “diversification can only help our long-term growth and viability,” said Dana Rashti, chief strategy and marketing officer at Neighborhood Health.

More than two-thirds of the Boston-based insurer’s 381,000 members are covered by Medicaid, the government insurance program for the poor that in Massachusetts is known as MassHealth. The other third are in employer-sponsored plans or buy individual plans, some of them subsidized by the government. Rashti said the company wants to enlarge its share of members in employer plans, but did not specify by how much.

As they seek to court business customers, Neighborhood Health’s executives are reworking their branding. The company has hired a Newburyport marketing firm, Mechanica, and plans to launch a new ad campaign.

“We’re going to be spending the summer working on fine-tuning our message,” Rashti said.


In Massachusetts, the commercial market is dominated by three big insurers: Blue Cross, with a 40 percent share; Harvard Pilgrim, with 17 percent; and Tufts Health Plan, with 10 percent, according to state data. The national insurers UnitedHealth Group, Anthem Inc., Cigna Corp., and Aetna Inc. also have a presence.

The commercial market includes more than 4 million Massachusetts residents. Most of them get insurance through large employers that have hundreds or thousands of employees.

Neighborhood Health’s move into the market sets it apart from the other large Medicaid managed-care plans, which are not seeking small-business customers.

“It’s a market we’ve looked at, but right now we’re not going in that direction,” said Kevin Klein, chief marketing and sales officer at BMC HealthNet Plan, an insurer owned by Boston Medical Center that has 310,000 members.

Christopher “Kit” Gorton, president of Network Health, said his plan remains focused on Medicaid members and people who buy subsidized insurance on the state health insurance exchange — not on attracting business customers.

“We’re not out actively marketing,” Gorton said. “We don’t have a media buy. We’re not chasing that [part of the market] with a level of energy that matches the kind of outreach we’re trying to do with the subsidized [health plan] population.”

Network Health, with 270,000 members, is a subsidiary of Tufts Health Plan.

All of the Medicaid managed-care plans have struggled financially, prompting House Speaker Robert A. DeLeo to set up a commission this month to study their viability. The group is scheduled to give recommendations to the Legislature by Oct. 1.


By the numbers: Neighborhood Health Plan’s membership

381,441 total members

260,205 on Medicaid (MassHealth)

70,488 on employer plans

25,698 on individual plans

25,050 on subsidized individual plans

Priyanka Dayal McCluskey can be reached at Follow her on Twitter @priyanka_dayal.