Tufts-NEMC hires Zane to be chief

Zane, who runs the physician network for major competitor Partners HealthCare, the parent organization of Harvard-affiliated Massachusetts General Hospital and Brigham and Women's Hospital, said she originally was reluctant to leave Partners, which has grown into the largest and most financially successful hospital and doctor network in Massachusetts. She initially told a Tufts-NEMC recruiter who called her that "it probably would not be a match," she said yesterday.

But Tufts-NEMC, a Tufts Medical School teaching hospital that is struggling with million-dollar losses, pursued Zane. Tufts University president Lawrence Bacow and Bentley College president Joseph Morone, who are on the medical center board, invited Zane for an interview at Bacow's house on the Tufts campus on Columbus Day. "The chemistry was excellent," she said.

Zane, 52, will take over from Dr. Thomas F. O'Donnell Jr., the longtime surgeon CEO of Tufts-NEMC, who announced in July that he would resign as soon as trustees hired his replacement. Both O'Donnell and trustees said the hospital needed a leader with slightly different skills, a strong business person who would implement a strategic plan over the next three to four years.

The hospital, which this year dissolved its merger with the Rhode Island-based Lifespan healthcare network, had an operating loss of $12.5 million in the fiscal year that ended in September 2002. When the numbers are finalized, the hospital is expecting a similar operating loss for the latest fiscal year, $5 million of which was a one-time payment to Lifespan for leaving the network, executives said. The hospital employs 3,800 doctors, nurses, researchers, and other healthcare workers, includes Floating Hospital for Children, and has 450 beds.

With pressing financial issues, trustees said they were looking at hiring a non-physician, a departure from past practice. And yesterday, they did. Executives believe it is likely the first time since the hospital was created more than 200 years ago that it is being run by someone who is not a doctor.

Trustees would not disclose Zane's salary. Zane has headed Partners' network of 5,600 community and academic physicians for 10 years, during which she was a tough negotiator with insurance companies, helping to win groundbreaking double-digit fee increases for Partners. But she is not a doctor, and all the chief executives at Partners hospitals are physicians, a precedent that might have made it difficult for her to advance to running a Partners hospital. Before joining Partners, she ran Quincy Hospital from 1990 to 1994, overseeing a difficult financial turnaround.

Zane, whose husband, Peter Zane, sold his interest in Kryptonite Corp., the Canton lock maker, two years ago, said she had been thinking about "slowing down the treadmill, not speeding up," but was drawn to the challenges at Tufts-NEMC. She said the hospital has faced "a fair amount of distraction with unwinding the Lifespan merger, causing this organization to miss several beats."

"One of the first things I will do is develop a bold strategy, a thoughtful strategy to capitalize on its strengths," she said. "We need to refocus certain areas. We can't be all things to all people. These will be difficult discussions. Some areas may get expanded; others may not."

Trustees said they want the next chief executive to build business, increasing the number of patients in key clinical areas, among them cardiology, oncology, and liver and kidney transplants.

Zane's contract with Partners includes a confidentiality provision, which has implications for her job at Tufts-NEMC. For example, Zane can employ the skills and strategies she used in negotiating contracts for Partners as she tries to win higher fees from insurers for Tufts-NEMC. But she is forbidden from revealing to Tufts-NEMC the exact rate increases Partners negotiated or other proprietary information.

"Her not being a doctor didn't even come up," Morone said. "She had everything we were looking for. She had a track record of building a network and of working with complex combinations of physicians. She turned around Quincy Hospital, which had eight days of cash. She's a charismatic leader. And she's a tough negotiator."

Liz Kowalczyk can be reached at kowalczyk@globe.com.