His misstep is unlikely to keep Levy from top positions, observers say

By Kay Lazar
Globe Staff / January 8, 2011

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The shadow of controversy that marred Paul Levy’s last year as chief executive at Beth Israel Deaconess Medical Center will not foreclose another leading role for an executive renowned for taking on the toughest public and business challenges, predicted those who have worked with and observed him over the decades.

He is too talented to not land another top position, they said, although others said the controversy may create hurdles for the 60-year-old executive and he is not likely to end up in a top health care position.

In his nine years as chief executive at Beth Israel, Levy was known for championing transparency in health care and for taking some high-profile shots at others in the field in his widely read blog, Running a Hospital. He was also known as the leader who saved Beth Israel from almost flat-lining when he was hired and transformed it into a profitable hospital. In 2009, he was widely hailed for saving hundreds of jobs at the hospital with an innovative plan: Levy had staff forgo raises and benefits to prevent the layoff of 450 of the hospital’s employees.

But health care was only the most recent stop in an expansive career that included running the Massachusetts Water Resources Authority during its court-ordered clean-up of Boston Harbor and the state Department of Public Utilities in the Dukakis administration. He also was energy secretary in Arkansas, under Governor Bill Clinton, and later helped shape budgeting and planning as an executive dean at Harvard Medical School.

“He is a remarkably effective guy,’’ said former Massachusetts governor Michael Dukakis, who tapped Levy to head public utilities for a stint in the late 1970s and again in the mid-1980s.

“He seemed to be able to move from assignment to assignment and do the job without necessarily being an expert,’’ said Dukakis.

Levy’s ability to listen and build consensus was critical, Dukakis said, during his tenure as head of the MWRA, where he turned around the troubled agency in four years and brought the massive Boston Harbor clean-up project in on time and under budget.

Dukakis said that leadership style and record should help Levy surmount the current fall-out surrounding his relationship with a female employee while at Beth Israel.

“We all make mistakes, and we all have issues we have to deal with,’’ Dukakis said. “He is an extremely talented guy.’’

Phil Shapiro, the chief financial officer of Babson College, who was the chief finance executive at the MWRA during Levy’s tenure, said his unusual ability to make key decisions without waiting for every piece of information helped keep the Boston Harbor project on track during bumpy times.

Levy was a lightening rod for criticism over some of the tough decisions he made about siting sludge facilities while at the MWRA.

“People who wait to get every last detail of information are pretty much paralyzed and can’t move quickly enough to solve problems,’’ Shapiro said.

“In this world, there is always uncertainty, but a lot of people want to have every question answered before they make a decision,’’ Shapiro said, “and Paul has the confidence and the willingness to be wrong.’’

Shapiro said he does not believe the corporate world will look askance at Levy for future leadership roles.

But longtime health care consultant Dr. Marc A. Bard, managing director of Navigant Consulting in Needham, which has done work for Levy during his Beth Israel days, said he believes Levy will have a tough road ahead of him and is unlikely to play a significant role again in health care.

Bard said that national health care reform’s push toward reducing medical costs will require some unpopular shifts in money and care.

“These will be difficult moral choices, and people who are making them will have to have unimpeachable credentials,’’ Bard said.

“For all the good that Paul has contributed to society, you still are only as respected as your moral code publicly,’’ Bard said.

“Privately, people who know him may feel very differently,’’ Bard said. “But the arrogance that he showed with respect to the exposure of all of this really tarnished him.’’

Kay Lazar can be reached at