By Liz Kowalczyk
Globe Staff / January 8, 2011
Paul Levy, chief executive of Beth Israel Deaconess Medical Center for nine years, announced his resignation yesterday, just as the hospital board was wrapping up the first comprehensive review of his performance.
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Levy steered the hospital from the brink of financial failure into a stable business, but his achievements were clouded by investigations last year into his relationship with a female employee.
In an interview from his office yesterday, Levy said his resignation was unrelated to those investigations. He said he started to reevaluate his career when he turned 60 in August and reached a final decision after returning this week from a 10-day biking and camping trip in the Atlas Mountains in Morocco.
Levy said he realized that, with the Harvard-affiliated hospital now profitable and attracting more patients, the thrill was gone.
"Once [the turnaround] is in place, I have less enthusiasm for the maintenance of things," he said. "I sat around the campfire every night thinking about what I wanted to do."
Levy said he will remain in the job for “a few weeks," after which chief operating officer Eric Buehrens will run the hospital temporarily, while the board searches for a permanent replacement. Before coming to the hospital in 2007, Buehrens was a deputy provost at Harvard University and a dean at its medical school.
Neither Levy nor board chairman Stephen Kay would comment on whether the board agreed to provide Levy with a severance package.
Kay said in an interview that Levy’s decision “took him off guard."
On Thursday morning, just hours before he told Kay he was leaving, Levy wrote a post on his popular blog, Running a Hospital, saying his New Year’s resolution was to help "save some lives" as head of a Harvard teaching hospital, odd words for a man about to quit.
In e-mails to the Globe, Levy stuck by his assertion that he had already largely made up his mind to leave and said there was no decisive event during the day Thursday.
He said he felt "some ambivalence" when he wrote the post titled “Resolve."
The board’s comprehensive review of Levy’s performance in 2010 yielded both positive and negative feedback from physicians during the past month, some of whom were concerned that Levy’s errors in judgment last year had harmed his ability to lead effectively and raise money from wealthy donors.
“Paul was the best strategic thinker that we’ve ever had in my 40 years at the Beth Israel," said Dr. Tom Delbanco, a popular internist. “My sense and that of many of my colleagues was that with a cloud hanging over him it produced an enormous disadvantage in future dealings with important people from hospital leaders to payers and policy makers and donors." Continued…
Levy is credited by many with turning around Beth Israel Deaconess’s multimillion-dollar losses in the early 2000s, initially by laying off employees and selling underused real estate and then by hiring a number of top-notch physician leaders, winning him the deep loyalty of many board members.
He gained national attention as a compassionate leader when he asked staff to take pay cuts to save the jobs of low-paid workers.
But the board began an internal investigation last spring, following an anonymous complaint about Levy’s personal relationship with a longtime female employee. The board eventually imposed a $50,000 fine on Levy for undisclosed lapses of judgment, released a public statement of disappointment, and said it would consider the matter in setting his salary for this year.
The woman, who no longer works at the hospital, was hired by Levy in 2002 as a strategic planning analyst and eventually became chief of staff at the hospital’s Needham campus. Levy has described her as a “close, personal friend."
After a four-month investigation, Attorney General Martha Coakley’s office concluded in September that while Levy had not misused charitable funds at the nonprofit hospital to pay his friend, the board should do "some soul-searching" about his ability to continue leading.
In an e-mailed letter to the hospital community yesterday, Levy made a general reference to the controversy.
"Over the last nine years, I have certainly made mistakes of degree, emphasis, and judgment," Levy said in his e-mail. "I have apologized to you directly for some of those, but I do so again, in the hope that such errors will not overshadow the many accomplishments and contributions of our hospital to the community and the health care industry. On the personal level, if I have slighted any one of you in any way or given you any cause for concern about my warm regard and respect for you, I doubly apologize."
During the interview, Levy said his resignation was unrelated to his mistake in judgment. "That was over," he said. "That was almost a year ago. The board had given me a vote of confidence."
Because the hospital is doing well — he said the number of patients seeking care there grew last year, when the hospital had its most profitable year ever — Levy said he does not believe the relationship hurt Beth Israel Deaconess.
But not everyone is so sure. Some doctors said that philanthropic giving has not rebounded since the recession and that Levy has been distracted from planning for huge changes on the horizon in how insurers pay hospitals.
During a meeting last month of leaders in the department of medicine, Dr. Mark Zeidel, head of the department and a hospital board member, solicited opinions about Levy’s performance. Zeidel would not comment on the details of the discussion.
Dr. Richard Schwartzstein said doctors made both positive and negative comments.
"There is appreciation for what he has done; there is no question people feel the institution is stronger in every way" since he came," Schwartzstein said.
Dr. Richard Wolfe, chief of emergency medicine, said he was one of four department chiefs who spoke to the board for Levy’s review. He said he applauded Levy’s financial acumen, particularly a deal he struck with the large doctors’ group Atrius Health, which has redirected patients from Brigham and Women’s Hospital to Beth Israel Deaconess.
But, he said, he has lingering concerns "there needs to be less focus on the personal actions of the hospital’s leader and more on the hospital’s mission."
Kay said doctors did not force out Levy. "Paul wanted a change and there is nothing more to it," he said. "If you know him, you know he loves a crisis. Running a hospital? Been there, done that."
Kay would not comment on the details of the board’s review of Levy.
In a statement sent to hospital employees, he praised Levy for placing the hospital on "solid financial footing" and "making significant improvements in quality and patient safety."
"When the situation demanded a bold vision, Paul delivered," Kay wrote. "When austerity was the order of the day, Paul answered with compassion."
Levy said he is unclear about his next move. He is married and the father of two grown daughters, Levy and his wife are separated and plan to divorce this year, he said.
As for the next step in his career, he said he would catch up on his fiction reading and "take some time to think about it."
Liz Kowalczyk can be reached at kowalczyk@globe.com.
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