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AG concludes review of Levy case

E-mail | Print | Comments () Posted by Gideon Gil September 1, 2010 08:13 PM

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By Liz Kowalczyk, Globe Staff

The Massachusetts Attorney General's Office said today that a personal relationship between Paul Levy, chief executive of Beth Israel Deaconess Medical Center, and a female employee "clearly endangered the reputation of the institution and its management," and it found that "his continued, repeated and acknowledged failure to appreciate and address the situation merited, if not compelled, disciplinary action" by the hospital's board.

In a report issued today, Attorney General Martha Coakley's office said it found no evidence of misuse of charitable funds by the hospital -- the primary focus of an investigation that began in May.

But Coakley's staff was critical not only of Levy, but of the board and senior management, saying they shared responsibility for "this unfortunate and preventable situation."

Coakley said in an interview that she expected the board to reconvene to discuss the report and "do some soul-searching" about Levy's ability to continue leading the Harvard teaching hospital and about members' own ability to evaluate him objectively.

The Attorney General's Office outlined its findings in an 11-page letter to board chairman Stephen Kay from Jed Nosal, an assistant attorney general.

Kay said in a written statement today that the board finds "the report to be a fair evaluation and we accept its findings." He said "we will continue to monitor these events" but did not address whether the board would consider further action against Levy and did not comment on his status. The board previously had fined Levy $50,000.

Levy issued a statement today, saying: "I am pleased that the Board of Directors asked the Office of the Attorney General to review their actions and to ask for suggestions to improve our governance. I again apologize for my errors of judgment in this matter. I look forward to working with the Board and the entire BIDMC community in continuing to serve our patients and the public."

In the report, the attorney general's staff said that when the full board received a complaint about Levy in April, it eventually "responded and acted consistent with its fiduciary obligations." But, investigators said, the board should have been informed about the situation years earlier, and, if it had been, it could have avoided the damage that has occurred to the hospital. Several board members and senior managers had known about Levy's relationship for years.

"The Attorney General’s review determined that some board members and hospital staff had became aware of the existence of a personal relationship between Levy and the employee as early as 2003-04, with some board members counseling Levy to end the relationship," according to the report. The Attorney General's Office concluded that had the entire board been informed and taken definitive actions when those concerns were first expressed to Levy, "much, if not all, of the damage may have been averted."

The report said respect for Levy's accomplishments in turning around the hospital's troubled finances may have created a level of deference to management and affected the board's independence.

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About white coat notes

White Coat Notes covers the latest from the health care industry, hospitals, doctors offices, labs, insurers, and the corridors of government. Chelsea Conaboy previously covered health care for The Philadelphia Inquirer. Write her at cconaboy@boston.com. Follow her on Twitter: @cconaboy.

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