Tufts Medical Center taps new CEO

Beyer, 50, will take the reins Oct. 1, the start of the hospital’s fiscal year. He succeeds the current chief executive, Ellen M. Zane, 60, who will retire at the end of September.

The appointment assures continuity at the city’s oldest hospital. Beyer has worked closely with Zane, who has been widely credited with leading a financial turnaround at Tufts. The hospital was losing more than $18 million when she arrived in 2004 but posted a profit of $5.3 million last year, according to state figures released earlier this month.

But like other hospitals in Boston and across the state, Tufts will face intense pressures in the coming years as the state and federal governments reduce payments for Medicaid and Medicare, health insurance programs that cover low-income and older patients. Those programs account for slightly more than half of the Tufts payer mix. “The challenge will be to remain ever-competitive in the market when the dollars are shrinking,’’ Zane said.

Tufts, a teaching affiliate of Tufts Medical School, will also have to strengthen its network of alliances with community hospitals and outside doctors groups at a time of consolidation in the health care sector. Just this week, Lahey Clinic in Burlington, another Tufts teaching hospital, disclosed plans to merge with Beverly-based Northeast Health Systems.

“We have to pick our eyes up and think about the future,’’ Beyer said in an interview. “The future will be very challenging. But in spite of all the challenges, we have to drive the hospital forward. We will make our case that we don’t think these proposed [Medicaid and Medicare] cuts are appropriate. If they happen, we’ll have to deal with them.’’

Tufts has grown its patient volume and eked out a modest profit in recent years despite government cuts. But its 2010 margin of 0.8 percent - far less than rival teaching hospitals - has strained its ability to invest in technology upgrades and renovations.

Pledging to press forward with strategy begun under Zane’s watch, Beyer said his goal is to position Tufts as a high-quality, lower-cost alternative to more expensive academic medical centers. He said he would also build on clinical alliances with community hospitals, from Jordan Hospital in Plymouth to MetroWest Medical Center in Framingham, to keep routine care locally but refer patients requiring more complex procedures to Tufts. Another goal, he said, was to train the next generation of Tufts Medical School physicians.

Beyer, who has been president of the Tufts Medical Center Physicians Organization, stopped short of promising to engineer a mega-merger with one or more other hospitals.

“We’re open to it,’’ he said. “But I think it would be a mistake for us to say that everyone’s choosing a dance partner and we have to do it, too. If there’s a good fit, we’ll look at it.’’

His appointment, approved unanimously by the hospital’s board of trustees, marks the latest step in a changing of the guard at Boston area hospitals. Over the past two years, new leaders have been hired at the Brigham and Women’s Hospital, Boston Medical Center, St. Elizabeth’s Medical Center, Carney Hospital, Joslin Diabetes Center, Lahey, and Northeast. Beth Israel Deaconess Medical Center is searching for a new chief executive.

While he has run the 550-doctor Tufts physicians organization since 2006, Beyer is not a doctor. He has spent more than 25 years in health care management and was recruited by Zane, the first nonphysician chief executive at the 215-year-old hospital, to manage two in-house doctors groups being merged in an efficiency move. Since then, he has been a top lieutenant to Zane and was seen as the heir apparent by many of Tufts’ 5,000 employees.

Zane, a Tufts trustee who will become the hospital board’s vice chairwoman in October, had championed Beyer since the start of the chief executive search. Before recruiting Beyer to Tufts, she had hired him as chief operating officer at Partners Community HealthCare Inc., the doctors group Zane formerly led for Partners HealthCare System Inc.

“In my mind, Eric was always the likely successor to me,’’ Zane said. “I have been Eric’s strongest advocate.’’

Still, the board’s search committee, led by Susan Leff, a senior vice president at Wells Fargo Bank, considered other local and national candidates as well as Beyer. Zane, who will continue to work for Tufts as a consultant and fund-raiser, was not part of the search group.

Ultimately, the board voted for the insider. “We knew we had a good candidate, but we wanted to test him against the talent nationally,’’ said Tufts University president Lawrence S. Bacow, a member of the hospital board’s executive committee. “This is a terrific appointment. . . . There’s not a major decision over the past four or five years that Eric hasn’t been involved in.’’

Beyer, a native of Schenectady, N.Y., who now lives with his wife and two sons in Wellesley, said he will spend the next two months working on the transition with Zane and meeting with Tufts employees. They will include unionized hospital nurses with whom Tufts clashed in a recent contract standoff, reaching a last-minute agreement that averted a threatened strike over staffing levels.

“That was a stressful moment for everybody,’’ Beyer said, “but we really want to work together.’’

Robert Weisman can be reached at weisman@globe.com.