Levy is fined $50,000 for lapses in judgment

Hospital board cites relationship

By Liz Kowalczyk
Globe Staff / May 4, 2010

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The board of Beth Israel Deaconess Medical Center imposed a $50,000 fine on chief executive Paul Levy yesterday for undisclosed lapses of judgment in a personal relationship with a female employee and said it will consider the matter in setting his salary for next year.

After its third emergency meeting in a week, board chairman Stephen Kay said in a written statement that “outside counsel’’ found that Levy did not violate hospital policies, but that “over time the situation created an improper appearance and became a distraction within the hospital.

“The Board believes that Mr. Levy should have recognized this situation in a more timely fashion and should have conducted himself in keeping with business protocol appropriate for the office of the CEO,’’ Kay said.

Hospital spokeswoman Judy Glasser said the decision to fine Levy was nearly unanimous, the exception being board member Patrick Ryan. Ryan resigned yesterday, apparently in protest that the board did not take tougher action against Levy.

Reached while traveling, Ryan, who participated in the meeting by phone, would not comment about his decision to resign after five years on the board.

“I’ve enjoyed my tenure,’’ he said. “It’s a great institution.’’

Kay’s statement is the second in a week on Levy’s conduct with the unnamed employee, who no longer works at the hospital. Many questions remain unanswered.

The board first acknowledged the situation last Monday, saying that some members had received an anonymous letter involving “allegations about our CEO.’’ At that time, the board said it had investigated the allegations and found that Levy had not violated any policies or laws.

The board said last week that it stood by Levy, but its concerns over the matter were strong enough that the directors reconvened to discuss what further action to take.

The board had discussed requiring Levy to repay the hospital for a severance package that was given to the woman when she left her job last year at Beth Israel Deaconess-Needham, because some members were concerned that the woman might have left her job because of her relationship with Levy, according to hospital sources.

Members also discussed the appropriateness of various jobs the woman held, sources said, including as a special assistant to Levy and a management job at the hospital’s Needham campus, and whether favoritism was involved in her getting those jobs.

Yesterday, Glasser said the $50,000 is not connected to the woman’s severance pay, but is ‘’just an expression of their disappointment.’’

She said some board members recently received a second anonymous letter containing additional allegations, but that the board’s lawyer investigated these charges and determined they are untrue. The outside counsel is Robert Sherman, a hospital trustee; trustees advise the board.

Levy, 59, could not be reached for comment. He has been chief executive since 2002 and has made a name for himself as an outspoken advocate of openness regarding hospital costs and quality. He released a statement and posted it on his blog.

“I appreciate the board’s thoughtful consideration of this issue,’’ he said. “I agree with their conclusions that I made an error in judgment, and I believe the board has acted appropriately. Today I met with the board, apologized to them again, and accepted their actions in resolving this matter. I regret that my behavior had such wide repercussions for the entire BIDMC community, and I will always feel sorry for any discredit I brought upon BIDMC. . . . I look forward to putting this chapter behind us and working together in carrying out our public service mission.’’

Levy also apologized to the ‘’loyal readers’’ of his blog, saying he hopes that “this series of events and revelations will not undercut the importance or validity of what I have been saying. I especially apologize to you if you feel that I have let you down and, in so doing, in any way weakened the case I have been making. We in the medical community have much to do in these areas. I hope we can together continue to engage in vigorous activity to help make health care safer and more patient-centered.’’

In the end, the board seemed to be counting on Levy’s ability to put the incident behind him and continue as a credible leader and spokesman for the need to improve quality in hospitals.

“Although in this instance, Mr. Levy has not lived up to the standards we set for our CEO, the board also considered his exemplary record over the course of his tenure at BIDMC, the current performance of the hospital, his role as the chief architect of the hospital’s leading position in quality and safety, and his bold voice of leadership on public policy,’’ Kay said in his statement. “Under Mr. Levy’s direction, the hospital has reclaimed its rightful place as one of the region’s preeminent providers of health care, medical education, and research. The board again expressed its full support and confidence in his continued leadership, and considers this matter closed.’’

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