Joan Vennochi

How not to run a hospital

Beth Israel CEO Paul Levy, who blogs about corporate transparency, is anything but transparent now

By Joan Vennochi
Globe Columnist / May 9, 2010

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THIS IS a painful story to write, as Paul Levy might put it.

It’s yet another story of a powerful man with powerful friends in powerful places who are trying to protect him when they shouldn’t.

Levy, the president and CEO of Beth Israel Deaconess Medical Center, was recently fined $50,000 by the hospital’s board of directors for undisclosed lapses of judgment in a personal relationship with a female employee.

Consider this scenario: Smart, well-connected older man meets smart, ambitious younger woman through an MIT faculty/student advising program. He recruits her to work at the hospital that he heads. She works as his special assistant, and then moves to a job as chief of staff and director of strategic planning for the hospital’s Needham campus. She leaves with a severance package of unspecified amount.

The plot thickens when the hospital board receives an anonymous letter. Forced to deal with what it reveals, board members fine Levy for an inappropriate relationship, as if he’s Kevin Garnett throwing an elbow.

Now, Levy and the board want to cast this as an internal matter that should end with a fine and apology.

But, questions abound. What was the woman’s salary? How much was her severance package? Isn’t this abuse of power by a top executive who casts himself as a leader in the health, business, and political community? If it is, why is he still a top executive?

How did Beth Israel executives justify the subordinate’s position, given the hospital’s well-publicized financial problems and the hundreds of millions it receives in federal money? If the inappropriate relationship between Levy and the employee were the open secret some people describe it as, how many of Levy’s colleagues knew about it and why did they ignore it?

Levy, whose blog about running a hospital is a nationally acclaimed cry for corporate transparency, is anything but transparent when it comes to questions about his own on-the-job behavior. Last year, Levy basked in worldwide media attention when he went public with his plea that the staff give up raises and benefits so the hospital would not have to lay off its lowest-paid workers. Now, he refuses to address a less-flattering illustration of his leadership, beyond posting his apology on his blog.

He, in turn, is being protected — just like the mysterious married businessman from the Boston area who wanted a “last hurrah’’ and got more than he bargained for when the woman he hired for sex demanded money from him in return. She was charged with extortion and named in court records; his identity and good name were protected.

The Beth Israel board could not hide Levy’s identity, but rallied to save his job on the grounds that what he did was a distraction that did not violate hospital policy. One board member, Paul Ryan, a Texas-based health care executive, resigned over the Levy controversy. Local health care entrepreneur Chester Black also stepped down from the hospital’s 55-member board of trustees over the flap.

Levy is moving on, with his self-righteousness intact.

“This is a painful story to write,’’ Levy blogged last week.

He went on to discuss a friend who was diagnosed with lung cancer by his local medical practice. His doctors offered him a chance to enroll in a clinical trial. Through Levy’s intervention, the friend received a second treatment option from Boston doctors. The friend’s local doctors discouraged him from doing that, and suggested he might lose out on the clinical trial. He went with the second opinion, with good results.

The whole experience led Levy to conclude: “I see a medical practice that intentionally put one of its patients at risk to support the advancement of one of its doctors and perhaps the financial advancement of that person or the practice, too.’’

Didn’t Levy do a variation of the same thing?

Strip away the gauze and this is what the world sees: an arrogant CEO who intentionally put the reputation of his institution at risk to support the advancement of a female subordinate with whom he had a personal relationship.

The truth hurts. Levy’s credibility as a moralizer is gone, even if he isn’t.

Joan Vennochi can be reached at

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