The health care doctor
He stunned the medical world by getting a private equity giant to buy a group of debt-drowning community hospitals. But that's just step one of Ralph de la Torre's plan to build a model for the nation.
Just before 5 p.m. on a Saturday in mid-October, a Cadillac limousine climbed the curvy driveway outside the Newton home belonging to Dr. Ralph de la Torre and his wife, Wing. Inside, the 75 guests were anxiously awaiting the main attraction while staying busy wondering how long the de la Torres’ adorable 2-year-old twin sons would be able to keep their neckties attached and their dress shoes on. Swell parties like this are not uncommon in the West Newton Hill neighborhood, which is dotted with multimillion-dollar houses like the de la Torres’ place. Still, this gathering stood out
for two reasons. First, just about every person attending had paid $15,000 a pop to be there. Second, the guest of honor was none other than President Obama.
The event was one of just two stops the president made during his quick trip to Massachusetts on October 16, 2010, the other being a rally in Boston for Governor Deval Patrick. It was easy to understand why Air Force One would touch down for that rally, since Patrick is a close friend of Obama’s and the governor was then in the final weeks of his tough reelection campaign. But more than a few Democratic activists were scratching their heads trying to figure out why the president would be making a house call to a man whose name was unfamiliar to them. Had they inquired at the town clerk’s office in Swampscott, where de la Torre lived before moving to Newton, they might have found themselves even more perplexed. As recently as 2007, he was a registered Republican.
De la Torre (pronounced DEL-a-TOR-ree) says that, like many children of Cuban immigrants, he has long identified with the conservative Republican outlook on foreign policy, though he is a social liberal. Sometime after he moved to Newton, he switched his registration to independent. Regardless, he stresses that he was not politically active until recently, when he became motivated to fund Democratic candidates because of that party’s commitment to overhauling health care.
There’s evidence to suggest that his explanation is somewhat incomplete. Yet his stunning 0-to-60 ascent, from a political non-factor to a guy hosting the president at his house, is not at all out of character for de la Torre, a man of ample ability and breathtaking ambition. During his career, the 44-year-old heart surgeon-turned-hospital executive has shown himself to be a brilliant maestro, time and again using his relentlessness, charm, vision, and opportunism to turn an array of opponents into a symphony of supporters.
His most recent symphony was his most impressive work. As CEO of the Caritas Christi hospital network, he pushed through an $895 million deal late last year that took a group of community hospitals founded primarily by nuns to care for the poor and put them in the hands of the New York private equity giant Cerberus, a firm that takes its name from the mythical three-headed dog guarding the gates of Hades. To steer the deal through, he orchestrated an unlikely alliance of the Boston Archdiocese, Democratic elected officials, the Service Employees International Union (SEIU), and community organizers in some of the state’s poorest cities – all to support turning the struggling nonprofit hospital chain into a for-profit operation owned by a group of high-flying financiers. In what may well be an example of the way de la Torre is always playing chess four moves ahead, the crucial SEIU support was an outgrowth of a nearly unprecedented overture he had made two years earlier, shortly after he joined Caritas, to invite the union to come into the hospitals and try to organize his workers.
And, of course, de la Torre had to sell the clear-eyed suits from Cerberus Capital Management on the wisdom of investing hundreds of millions of dollars not just in low-margin hospitals in high-cost Massachusetts, but specifically in debt-drowning, leaky-roofed facilities like Dorchester’s Carney Hospital that many analysts had written off for dead.
Ten days before the president’s visit to de la Torre’s house, which raised $900,000 for the Democratic Senatorial Campaign Committee, the sale of the hospitals to Cerberus received the crucial blessing of Attorney General Martha Coakley’s office. Coakley did not attend the October 16 event with Obama and US Senator John Kerry, although she was the guest of honor at a similar fund-raiser held at the de la Torre home the previous fall when she was running for US Senate.
Some state Republicans complained that Coakley should not have been signing off on a deal being advanced by a major campaign donor, although they could produce no evidence that her office’s review was anything but thorough and deliberative. Also, the attorney general did succeed in having additional safeguards baked into the agreement, which was ultimately approved by the Supreme Judicial Court. In the end, the biggest selling point for the unorthodox Cerberus deal may well have been the absence of any other good options. “The failure to do something to save Caritas would have been a disaster,” Coakley says.
The events demonstrated that if Ralph de la Torre had not yet been a household name outside the insular world of Boston medicine, that was surely about to change. Andrew Dreyfus, the president and CEO of Blue Cross Blue Shield of Massachusetts, calls de la Torre’s performance in talking public officials, labor, and advocacy groups into going along with the deal “one of the most remarkable acts of public persuasion that we’ve seen in this community in a long time.”
You might assume that if you don’t have an affiliation with one of the half-dozen Caritas hospitals, then de la Torre won’t have much of an impact on your life. But that would be wrong. Caritas – or Steward Health Care System LLC, as the for-profit company is now called – is already the second-biggest health care system in New England. And flush with Cerberus cash, de la Torre will be going on a shopping spree that promises to make it much bigger, starting with the planned purchase of hospitals in Ayer and Haverhill.
Moreover, he vows to build a large network of lower-cost high-quality community hospitals – what some have branded a “Southwest Airlines” approach to medicine – that could be replicated in other parts of the country. His moves are coming at a time when Massachusetts officials and private insurers are pushing dramatic changes designed to rein in costs by overhauling the way health care is delivered. In this new environment, the once lowly community hospital, because it can deliver care more affordably, will take on much greater importance. De la Torre’s timing couldn’t be better.
Although significant questions remain about his odds of success, de la Torre is poised to become one of the most influential players in Massachusetts’s vast medical industrial complex, and his actions have the potential to change the complexion of care you receive from your doctor or local hospital.
Boston medical leaders are now watching him closely. That includes Dr. David Torchiana, his friend and mentor, who served as Massachusetts General Hospital’s chief of cardiac surgery when de la Torre trained there. Now CEO of the 2,000-member Massachusetts General Physicians Organization, Torchiana says his former resident “has shaken up the Massachusetts health care market more than anything since the formation of Partners,” the powerhouse marriage of Mass. General and Brigham and Women’s Hospital in 1994. Lately, Torchiana has been fielding questions from lots of colleagues wondering what de la Torre might do next. “My view of Ralph,” he tells them, “is that he’s aggressive and unpredictable. So you ought to be very respectful of anything he’s involved in, because it’s going to move.”
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The irony is he’s not even supposed to be here.
The de la Torre family story bears the markings of the classic immigrant overachiever narrative. The father, Angel de la Torre, was an internist in Cuba who fled his homeland for political reasons in 1960. He arrived in Florida with no money and no English. When he started over his medical training, he chose cardiology. His oldest son, Ralph, was born during his training, followed by another son, Paul, a few years later.
Angel was a demanding dad. When Ralph would proudly present a test grade of 97, his father would ask, “Did anyone in the class score a 100?” But Angel, who was building a dominant cardiology practice, also gave his son the gift of self-possession. It’s evident in the framed photo of father and son that Ralph keeps today in his office. How else to explain a boy of 12 sitting in a serious hospital setting, wearing scrubs, and projecting the supreme confidence of someone who knows he belongs there? Ralph would often accompany his father to the hospital, gowning up and helping pass out catheters.
Just as he had systematically mapped out his own life plan, Angel did the same for Ralph. And the son excelled at every challenge. He earned his bachelor’s degree in engineering at Duke University in 1988, did a combined program in medicine and technology at Harvard Medical School and MIT, and then went to Mass. General for his long residencies in general surgery and cardiothoracic surgery.
By the late 1990s, the handsome boy in scrubs had turned into a strapping 6-foot-2 man in his early 30s, a weight lifter who kept barbells and protein shakes in the Mass. General call room. He had a politician’s knack for connecting easily with people up and down the power ladder, from surgical chiefs to the guys sweeping the floor. He prided himself on working longer and harder than anyone else around, but also enjoying the finer things during his limited free time. He drove a Land Rover, lived in a brownstone in the Back Bay, and bought suits at Louis.
As widely as he made friends, he showed a laser-like focus on cultivating bonds with the people who he felt could teach him the most and further his career. Topping this list was Torchiana, the cardiac surgery chief referred to as “Torch” by pretty much everyone besides his mother. In a specialty that tends to attract type-A personalities, de la Torre struck Torch as a chart topper in both drive and talent.
During their long conversations over the operating table, Torch came to understand the central role Angel played in Ralph’s life. So he was not surprised to hear that Ralph’s father wanted him to return to Jacksonville, Florida, to join a highly respected cardiac surgery group. More than just a successful physician, Angel was an innovative medical organizer, understanding how to line up referral networks to build a powerhouse practice. Although the cardiac surgery group was not technically part of Angel’s practice, his influence over it was considerable.
By 1999, as his son was nearing completion of his training, Angel had semiretired, but he held sway over the practice, expecting that Ralph would continue his empire-building. When the deal, which would put the 33-year-old surgeon on track to earn an annual salary of more than
$1 million within two years, was essentially done, Ralph flew south to look for a beachfront condo to rent.
But there were bumps on the road to Jacksonville.
Late in his time at Mass. General, he had begun dating a surgical resident named Wing Cheung. Like de la Torre, she came from an immigrant family – she was born in Hong Kong – but in just about every other way, they seemed polar opposites. While Ralph filled a room with his booming, raspy laugh and larger-than-life personality, Wing was soft-spoken and understated. Yet she was every bit his intellectual match, and they clicked. “It’s not so much what it was,” he says, “it’s what wasn’t. There was nothing missing.”
Because Wing would be tied to Boston for several years, Ralph worried that if he left he might miss out on the woman of his life. So he began dropping hints to his father about a possible change in plans. Angel was hearing none of it.
When Ralph told him about his feelings for Wing, his father replied: “Fine. You can fly her down every weekend.” That forced Ralph to dig deeper inside himself. His reluctance really had more to do with his dad. He realized he respected his father not because he was a doctor but because he had built something out of nothing. “Here was a guy who speaks, on a good day, very broken English in Jacksonville, Florida – the heart of the South,” Ralph says, “and he built a great practice that was incredibly respected.”
Ralph flew to Florida to break the news. “Dad,” he said, “I need to build something of my own.”
His father was furious, or rather a higher order of furious that Ralph calls “Cuban mad.” Ralph didn’t budge. Instead of being on the fast track to a seven-figure salary in Florida, he remained in Boston, scrambling to find a job and eventually accepting a cardiac surgeon position at Boston Medical Center that paid about $175,000.
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He stayed at Boston Medical for only a year, jumping to Beth Israel Deaconess Medical Center for a better opportunity. Dr. Frank Sellke, Beth Israel’s relatively young interim chief of cardiothoracic surgery, saw great things in him. While Sellke’s gifts were on the research side of cardiac surgery, de la Torre’s were in the operating room. He quickly became one of the highest volume heart surgeons around and a brilliant innovator. When I asked his colleagues to rate de la Torre’s drive on a scale of 1 to 10, they reliably responded “11.” For about a year, he flew a couple of times a month to Memphis, partly to get access to a lab stocked with cadavers on which he could practice his latest techniques. De la Torre refined a minimally invasive “keyhole” procedure in which he repaired heart valves without cutting through the patient’s bone or muscle. He took tough cases that others declined and still managed to help drive down the department’s mortality rate. Although he had two malpractice settlements during his tenure, even people who don’t care for him personally call him a profoundly gifted surgeon. With his engineering training, he detected inefficiencies in the hospital system and then employed his surgeon’s impatience to root them out.
After a couple of years, Sellke, who officially became chief in 2001, started hearing chatter that de la Torre was gunning for his job. He didn’t take it seriously. Traditionally, to be a chief at a Harvard-affiliated hospital like Beth Israel, you needed heavy research and teaching credentials, which de la Torre did not have. “When I heard Ralph was trying to undo me, I thought it was joke,” Sellke says. “It turns out the joke was on me.”
In 2004, de la Torre greatly expanded his reach when hospital officials named him chief of cardiac surgery, a section within the division of cardiothoracic surgery. Two years later, he gained freer reign over cardiac care after the hospital removed Sellke as chief of the division. Sellke – who stresses that he is happy now as a chief at Brown Medical School and remains one of the country’s best-funded cardiac researchers – says that although he respects de la Torre’s talents, he lost respect for him as a person. “He has a take-no-prisoners approach. If he interrupts or destroys someone else’s career, that doesn’t bother him in the least.”
De la Torre disputes that characterization and says the decision to remove Sellke wasn’t his. “The selection happened from above.”
De la Torre didn’t rest with his new authority. Instead, he hatched a plan to revolutionize cardiac care at Beth Israel. Traditionally, cardiac surgeons, vascular surgeons, and cardiologists operated in their own silos, even though they were all treating related cardiovascular diseases. De la Torre proposed the CardioVascular Institute, or CVI, as a way to break down those silos and centralize care by creating a “hospital within a hospital.”
Dr. Frank Pomposelli, a veteran vascular surgeon at Beth Israel and a close friend of de la Torre’s, loved the idea. “But I thought it was a pipe dream,” he says. “I never thought the hospital would relinquish that kind of control.” Cardiovascular care was a book of business for Beth Israel that exceeded a quarter of a billion dollars a year.
As he would do later in life, de la Torre identified all his opponents and worked methodically to persuade them they would win under his plan. He promised patients improved care, doctors a piece of the enhanced revenues that would spring from reducing system waste, and the hospital a success story to distinguish itself in the hypercompetitive Boston market. The CVI officially opened in 2007, with de la Torre as president and CEO. He continued his work as a surgeon, maintaining the salary of more than $1.3 million that he had earned the previous year.
Pomposelli says de la Torre’s enormous talent, intellect, and drive helped the CVI succeed in many ways, notably in removing waste from hospital operations and in building strong networks of affiliated physicians. De la Torre wined and dined community cardiologists around the region, persuading them to become affiliates and refer patients to Beth Israel for care.
But Pomposelli concedes that the CVI fell short in other ways. The silos were harder to break down than they thought, especially since “we didn’t pay enough attention to academics and research.” Also the “enhanced revenues” to physicians turned out to be far less than promised, leading to resentment. Pomposelli, who remains the chief of vascular surgery at Beth Israel, stresses that the CVI still exists, but in a much less ambitious form. “Ralph’s a builder. He loves the deal, loves creating new things,” Pomposelli says. “I don’t think he loves managing things as much. Running the CVI turned out to be tedious and difficult.”
In 2008, just a year after seeing his brainchild become a reality, de la Torre told Pomposelli he would be leaving to run the ailing Caritas hospital network. Pomposelli was surprised – until he realized the move was “classic Ralph. He loves a challenge. And he has the chutzpah to think he could do it even when no one else could.”
But Pomposelli can’t get over another decision de la Torre made. After a decade of training to become a cardiac surgeon and endless effort to become one of the best in the business, de la Torre decided to walk away from surgery. He’d been in practice for only about nine years.
De la Torre says it’s impossible to be a great heart surgeon working only part time. He even took the drastic step of letting his medical license expire, his way of refusing to look back. “Burn the boats on the beach, baby!” he says.
Late in his tenure at Beth Israel, de la Torre, according to numerous friends and colleagues, was increasingly seeing his ambitions bump up against those of his boss, then CEO Paul Levy. Moving to Caritas would mean becoming the top dog. As Pomposelli puts it, “There’s a part of Ralph that wants to be the king of the world.”
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Still, Caritas was an unlikely duchy from which to launch a royal conquest. The hospitals in the chain – flagship St. Elizabeth’s in Brighton, the Carney in Dorchester, Holy Family in Methuen, Good Samaritan in Brockton, St. Anne’s in Fall River, and Norwood Hospital – were all hurting. Worse, the system was weighed down by debt and underfunded pensions. De la Torre moved quickly to cut costs, improve efficiency, and negotiate increased reimbursement rates paid to Caritas hospitals by Blue Cross and other insurers. His actions helped turn around Caritas’s finances, going from a $20 million loss in 2008 to a $30 million operating income in 2009. But the debt, pension liabilities, and lack of access to capital combined to become an albatross on the chain. As of March 2009, Caritas had only 40 days’ cash on hand, according to Mark Rich, the CFO, who took to keeping extra-large bottles of Tums on his desk.
Then, in one bold stroke, de la Torre was able to recast the image of the Caritas hospital system from a sinking ship to a rising sun. In classic de la Torre style, the deal promised something for each of the stakeholders. The archdiocese, which administered the Caritas pension fund, would see support for the fund to the tune of $295 million as well as a continued commitment that the hospitals would follow Catholic doctrine and not perform abortions or sterilizations. The SEIU would get job preservation and a stronger beachhead in Boston from which to try to expand its organizing efforts into the city’s big-name hospitals. The communities would see their local hospitals stay alive, even getting spruced up rather than stripped for parts. And Cerberus would get a dynamic leader who could offer them both a laboratory for testing the post-health care-overhaul national market and a sort of cloak of righteousness, given the hospitals’ history of working with the poor. (Cerberus paid $495 million for the Caritas system, a sum that funded its pensions and retired most of its outstanding debt. It also committed to pumping another $400 million in capital improvements into the system over the next four years, although de la Torre acknowledges that those funds may come from hospital revenues in coming years, rather than from Cerberus itself.)
The SEIU alliance had its roots in an overture de la Torre had made a few months after taking over at Caritas. During a lunch that he had requested with Dennis Rivera, then the head of the SEIU’s health care arm, de la Torre invited the union to try to organize Caritas workers. How surprising was this move? Rivera, an important Obama political ally, says that in his 30 years of organizing, he’d received a similar invitation from a hospital CEO only twice before. Many hospital chiefs fear the SEIU’s power and the rise in labor costs that tends to follow the union’s arrival.
De la Torre and Rivera both say they immediately hit it off, bonding over their shared Hispanic heritage – Rivera is Puerto Rican – and switching between English and Spanish in conversation. De la Torre stresses that he has always had a genuine concern for workers on the lowest rung of the economic ladder, remembering how his own father had started his life in this country with nothing. Inviting the SEIU in to organize Caritas workers was simply the right moral decision, he says.
When I ask him whether it was also the right strategic decision – since he knew that he would probably be taking the chain through some kind of ownership change to keep it alive and that the SEIU’s political power both with its workforce and with state and national Democratic officials was well known – de la Torre stresses that concern for workers was his primary motivation. However, he says, “If it’s a good moral move and a good strategic move, it’s just a good move.”
Despite all those benefits, at its base the Cerberus deal is radical and untested. Sister Marie Puleo, the interim president of the Carney, says she works so closely with de la Torre as a member of his senior leadership team that he’ll often call down the hall, “Where’s my nun?” She admits that when he first explained his plan to sell the Catholic hospitals to a for-profit private equity firm, she was concerned. “I’m a Franciscan,” she says. But as she grasped how the deal will provide pensions for the workers who earned them and community benefits for the neighborhoods around the hospitals, she became a big believer. Like many on his team, she was impressed by de la Torre’s refusal to accept some otherwise attractive offers for Caritas because the potential buyers were not willing to fully fund the pensions for the system’s 13,000 retirees and vested workers. Although the Cerberus deal contains only a three-year guarantee that none of the hospitals will be shuttered, Puleo says de la Torre forged a future for these institutions. “It would have been very difficult to make three years,” she says, “if we had not done this deal.”
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The phone rang at 5:45 in the morning. Dr. Michael Callum didn’t need to check to see who was calling. Only Ralph, who usually sleeps just four hours a night, called this early. Lately, de la Torre had been better about waiting until at least 6 to call his deputies, largely at the insistence of his wife, Wing. It was just one more reason why everyone in Ralph’s life seems to adore Wing, a brilliant 38-year-old physician-turned-executive for
Callum, a urologist who met de la Torre when they were both residents at Mass. General, was by now both the head of Caritas’s physician network and de la Torre’s closest friend. The two families regularly vacationed together, or at least as regularly as de la Torre could be persuaded to vacation.
The date was Wednesday, October 20. Four days earlier, de la Torre’s focus had been hosting the president at his house. His eyes were now sighted squarely on getting the Cerberus deal over its final hurdles and signed, ideally in a matter of days.
“Something’s happened to Wing,” de la Torre told Callum in that early morning call. “Please come to Newton-Wellesley Hospital.” It was the first time Callum had heard that kind of emotion – fear, actually – in his friend’s voice.
“I’m on my way,” he said.
En route, Callum received a text message from de la Torre saying they were leaving Newton-Wellesley and heading to Mass. General, and he should meet them there.
When Callum arrived, he quickly grasped how serious the situation was. Wing had suffered a ruptured aneurysm and had been rushed to the neurointerventional suite for treatment. When Callum’s wife and father had suffered medical problems, de la Torre had stepped in to see that they got the very best care. He had done the same for countless friends and colleagues. That’s one of the many reasons he engenders such fierce loyalty in the people who work for him. Now de la Torre needed to do that for the love of his life. But as someone who is always most comfortable when he’s in charge, he had to come to terms with the limits of what he could control.
After several hours with de la Torre at Mass. General, Callum peeled himself away to drive to the Caritas headquarters in Brighton. He gathered the senior leadership team in an office and got de la Torre on the phone for just five minutes.
“I’m not going to be available for I don’t know how long,” de la Torre told his team. “I need you guys to push this over the goal line for everybody at Caritas.”
During the following weeks, de la Torre seldom left Mass. General. At one point, sitting in the ICU waiting area, de la Torre pointed out to Callum how the door was locked, closing down communication with the patients’ families. “We’ve got to change this when we do over our ICUs,” he told Callum.
Fortunately, Wing’s condition improved. “She’s having a great recovery at home,” de la Torre says, “and things are heading back to normalcy.”
The Cerberus deal was signed on November 6.
Callum says de la Torre is now more acutely aware of the central importance of family time. For example, he moved his weekly senior leadership meetings to 8 a.m., rather than 7, so he can spend an extra hour with his wife and sons.
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So how might de la Torre’s plan shake out over the next few years?
As he sees it, through investment in information technology and bricks-and-mortar hospitals, he will be able to offer a highly integrated “accountable care organization” that gives patients quality care, close to home, thereby keeping costs down. The key is insisting that patients get all but the most complex care from their community hospital, rather than seeking treatment for pneumonia or a broken arm at a big shop like Mass. General. (Currently, the price for an MRI performed at a teaching hospital is two to three times what it is at a community hospital.) As for the most complex care, de la Torre says he’s had talks with four of the five big Boston academic medical centers about creating alliances to provide it.
Still, many in the industry wonder what will happen if Caritas isn’t able to produce the kind of robust profits the Cerberus financiers usually expect within three to five years. Paul Levy, de la Torre’s former boss who recently resigned as CEO of Beth Israel, has speculated on his blog about how some fancy accounting maneuvers and systematic underinvestment in facilities – beyond what’s already been promised – may be enough to keep the deal looking good until the chain can be sold again. “The big question,” Levy says, “is what are these hospitals going to look like two or three owners from now?” As for being the low-cost “Southwest Airlines” hospital chain, Caritas has its work cut out for itself, because its hospitals are now at least slightly more expensive than their nearest community hospital competitor.
De la Torre says it’s ridiculous to think he would leave a rewarding and lucrative career as a heart surgeon to engage in a cynical exercise in accounting tricks. In the end, the biggest insurance policy against this deal ending badly may well be de la Torre’s towering ambition. When he was hired, he made it clear to the board that his goal was not simply to turn around Caritas. “My goal is to fix health care,” he says. To get there, he needs his Massachusetts operation to become a model that can be replicated across the country. In a few years, he hopes to be fielding calls from governors in places like Florida and Nevada, asking him to share his secret sauce. Who knows – if things go well here, he might even be taking a call from that guest of honor at his October house party, asking him to head up the entire national health care overhaul. But only if things go well here.
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One day several years back, de la Torre’s father came to Massachusetts for a visit. After Angel complained about the lousy coffee maker in Ralph’s kitchen, they went to
Sitting across the table in the coffee shop, the patriarch groused about the price of the espresso – $2.12 for something that cost 50 cents in Little Havana! – but then he leaned in and softened his expression. “I realized over the last couple of years that I never should have worried about you,” Angel told his son. “We could drop you into a tribe of cannibals, and you’d either get eaten within the day or you’d become king of the cannibals.”
Given how sparing with praise his loving but exacting dad had always been, that comment, Ralph says, was one of the most meaningful compliments he’d ever received. Then his father returned to complaining about the ice and cold in Boston.
“King of the cannibals” doesn’t have quite the same ring to it as “king of the world.” But, coming from his father, it meant the same thing.
Neil Swidey is a Globe Magazine staff writer. E-mail him at email@example.com.