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Harvard Pilgrim chief joins Beth Israel board

Email|Print| Text size + By Jeffrey Krasner
Globe Staff / November 22, 2007

In an unusual move, Charles D. Baker, chief executive of the state's second-largest health insurer, Harvard Pilgrim Health Care, has joined the board of trustees of Beth Israel Deaconess Medical Center, a premier academic hospital affiliated with Harvard University.

His appointment has drawn attention in Boston's close-knit medical community because insurance companies frequently battle with hospitals and other healthcare providers over issues such as payment rates for doctors, clinical quality, and how patients' cases are managed. As an insurance company chief executive who is now also on a hospital board, Baker could find himself caught in the middle of some arguments.

Baker and Paul Levy, chief executive of Beth Israel Deaconess, are particular ly outspoken in healthcare debates. They also have blogs on which they post opinions about local and national healthcare developments. Baker's is called "Let's Talk Healthcare," and Levy offers his opinions on a blog called "Running a Hospital."

Baker said he joined the hospital board after recently being approached about the position by Levy and by Ted Ladd, chairman of the hospital's board of trustees. He has since also joined the board's clinical quality committee.

"There's value in me learning more about how hospitals measure quality and how they try to improve," said Baker. "I'll learn a few things I don't know, and that will make me better at my day job."

Ladd, chairman emeritus of Standish Asset Management, a unit of the Bank of New York Mellon Corp., said he first met Baker in 2006 when Baker spoke at the annual meeting of Beth Israel Deaconess' Needham hospital.

"I see Charlie as an extra good source of wisdom," Ladd said. "We have lots of folks that have knowledge about medicine and business strategy on our board, and in every case we want to tap into that body of knowledge."

Nancy M. Kane, associate dean and professor of management at the Harvard School of Public Health, said hospitals and health insurance companies have dramatically different views when it comes to healthcare.

"Insurers have populations of members to worry about, most of whom are healthy," she said. "Hospitals really want people to be sick, because that's how they get paid. The two have very different ways of thinking."

But Baker's three-year appointment to the board could be good for both sides, Kane said.

He "can bring a lot of expertise around change-management and working with health plans," she said.

Beth Israel Deaconess has three boards. The directors oversee management of the hospital and make decisions involving personnel and finances. Trustees, who number about 80, have an advisory role and consult with the directors on specific issues. Overseers serve as "goodwill ambassadors" for the medical center, and the positions are largely honorary.

Trustees are not compensated for their service to Beth Israel Deaconess. Baker said he received approval from Harvard Pilgrim's board of directors to join the hospital board, and will recuse himself from discussions involving executive compensation, hospital management, or business dealings between the two organizations.

Ladd said being named to the board of trustees is not tied to whether a person donates money to the medical center. He added, "I would hope that anybody who is a member of any governance body at Beth Israel Deaconess would make the institution a priority in their charitable giving."

Baker said he hasn't given money to the medical center, other than indirectly when his three children were born at Beth Israel Deaconess. But he said he has contributed to other hospitals in the Boston area, and would "consider" donating to Beth Israel Deaconess.

Baker, former secretary of administration and finance for Massachusetts governors William F. Weld and Paul Cellucci, has led Harvard Pilgrim since 1999, and is credited with overseeing the insurance company's dramatic financial turnaround. Because of poor performance, Harvard Pilgrim had been overseen for years by the state attorney general's office.

Levy held prominent roles at the Massachusetts Water Resources Authority and Harvard Medical School before joining Beth Israel Deaconess in 2002. He is also seen as playing a key role in stabilizing the hospital's finances and putting in place a strategy for it to compete against Partners HealthCare Inc., the large hospital chain that includes other Harvard teaching hospitals.

Even though Beth Israel Deaconess is tapping him for his insurance expertise, Baker said, the opportunity to learn about the inner workings of hospitals by serving as a trustee means he is getting "the better of the deal."

Jeffrey Krasner can be reached at krasner@globe.com.

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