Quick fix

Simple solutions for seemingly complex problems

Within the past two months, Massachusetts has been hit with two enormous financial problems: first the collapse of Harvard Pilgrim Health Care (HPHC), which serves 1.1 million people, and now the news that the Big Dig will cost $1.4 billion more than had been expected. Not surprisingly, these developments have generated scores of newspaper headlines, all with the general theme that this is a "crisis" threatening to bring about the end of the world as we know it.

No one should downplay the importance of these problems, but the truth is that both can be solved with far less pain than the media and the fearmongers would lead us to believe.

* Harvard Pilgrim owes area hospitals about $300 million, according to the latest estimates. That's a much bigger problem than the $170 million 1999 operating deficit that was reported just a few weeks ago, and HPHC's total debt may yet be revealed to be even larger. But, for the moment at least, it seems we know the full extent of HPHC's problems.

This nonprofit HMO has historically been well-regarded, with customer-satisfaction ratings well above average. Its deficit is primarily the result of undercharging in order to build market share. In other words, its 1.1 million members paid less than they should have over the years. A number of intelligent observers have said that HPHC would be on sound financial footing now if it hadn't been for this mistake.

But HPHC has mended its ways. Reforms instituted over the past year by new HPHC head Charles Baker (who, despite having taken flak for his connections to Governor Paul Cellucci, is universally respected as a brilliant manager) are starting to kick in. And according to news reports, Attorney General Tom Reilly is now keeping a close eye on HPHC's finances. Although Harvard University proposed a plan on Tuesday to lend HPHC much of the money it needs to pay off its debts, why not simply take the $300 million deficit and spread it out over, say, four years? That's $75 million a year -- a sum that could easily be paid by the HMO's 1.1 million members. A family of four would have to pay a surcharge of just $1.45 a week for four years. Passing costs on to subscribers is never pleasant, but this sum would not be such a big deal, and it would be a far better solution than selling HPHC off to a for-profit insurance company or opting for a full-blown state bailout.

* The Big Dig cost overrun is $1.4 billion. Paul Cellucci wants a tax cut that would cost the state $1.1 billion a year. Are we missing something here? Cellucci's tax cut shouldn't be passed at all, but that is another issue. If it were delayed for just one year, most of the money needed to cover the overrun would be in the bank. Add to that the toll increases on the Mass Pike, which are absolutely necessary because the Big Dig is so costly. Voilà! Problem solved.

Of course, there are rumblings that the overrun could be more than $1.4 billion, and that oversight hasn't been as good as it should be. But let's recognize that this is the most complicated public-works project ever; it has to be expected that there will be cost overruns as unexpected problems pop up. This is not an easy job. It's enormously complicated and dangerous. And it's important work -- the Big Dig is the first major highway project in history that will actually knit an urban community back together rather than rip it apart. It's going to make Boston a far better place to live.

There's no question that these suggestions are simple -- perhaps naive, even. But there's also no question that they are steps in the right direction and should be pursued.

A final thought. In his budget proposal, Cellucci envisions grabbing a portion of the tobacco-settlement money and using it to pay for health care. Already the public-health do-gooders are screaming that it should all be reserved for tobacco-control programs. But anyone with half a brain already knows that smoking is bad for you. What's really a tragedy in this state (and this nation) is the number of children who don't have health insurance. The Phoenix urges Cellucci to grab all the tobacco-settlement money and use it as a down payment on solving the far more serious problem. The money is coming in. Let's make sure we put it to good use.

What do you think? Send an e-mail to letters[a]phx.com.