Ralph de la Torre was certainly the right man to orchestrate a visionary deal that has given a new lease on life to a chain of community hospitals around the state — but can he also be the executive who turns that plan into a reality?
Last year's deal to sell the struggling non-profit Caritas Christi hospital chain to a private equity firm has been widely hailed, and de la Torre, the hard-driving son of Cuban immigrants and celebrated former surgeon, has been praised for crafting the politically tricky agreement that gave the hospitals a second chance.
But now comes the even harder part: Can de la Torre and the private equity firm Cerberus transform the non-profit hospitals into for-profit money makers without upsetting Massachusetts’ fragile ecosystem of community hospitals?
If de la Torre fails, health care provided at Caritas hospitals and other hospitals around the state could suffer. Worse yet, they could close altogether. If de la Torre can pull it off, however, it could mean better quality health care at a better price for Bay State residents. And if de la Torre succeeds here in Massachusetts, he would also, no doubt, be called on to replicate his success in other states or at the national level.
According to a new profile by Neil Swidey, though, despite his obvious passion for the job, execution may not be de la Torre's strong point. Swidey relates a story from earlier in de la Torre's career to make this point. When de la Torre was chief of cardiac surgery at Beth Israel in 2004, he hatched a plan to revolutionize cardiac care at the hospital by creating a centralized CardioVascular Institute (CVI) there. Things started off well, both for the hospital and de la Torre:
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.
[Dr. Frank Pomposelli, a veteran vascular surgeon at Beth Israel] 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 then reality set in, and de la Torre's plans for the CVI fell short:
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.
Pomposelli, a close friend of de la Torre, added this assessment of his friend: “Ralph’s a builder. He loves the deal, loves creating new things. ... I don’t think he loves managing things as much. Running the CVI turned out to be tedious and difficult.”
This matters because there is a real risk of failure for Caritas — which de la Torre, despite his cheerleading for the Cerberus deal, is well aware of. In fact, the person who has best explained the risk is de la Torre himself, when he testified before the Public Health Council as a part the deal's approval process. "What is the risk?" de la Torre repeated when asked to explain how he plans on turning his non-profit hospitals into money makers:
The risk is that we are wrong. The risk is that the people in Massachusetts fundamentally don't care about the cost of health care or staying in their communities, and that they really just want to come to Boston. That is the risk. That is what we are gambling isn't the case.
de la Torre added that, "from the start," he has "been very clear with Cerberus" about these risks. In selling his vision to the people of Massachusetts, though, de la Torre hasn't always been as clear. To be sure, de la Torre has shown plenty of political acumen, getting unions, Church officials, community activists, and investors all on the same page. But creating long-lasting success at Caritas will be "tedious and difficult" — something de la Torre didn't show much patience for at Beth Israel. So while it's right to applaud de la Torre for his astonishing successes so far, it's important to realize that his most important challenges are yet to come.