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Financial Penalties for BIDMC CEO Paul Levy Don't Undo Damage

Philip Betbeze, for HealthLeaders Media, April 30, 2010

If you haven't heard about the personal failings and bad judgment of Paul Levy as CEO of Beth Israel Deaconess Medical Center, welcome back from your volcano-lengthened, month-long unplanned trip to Europe.

The latest comes from the Boston Globe. Sources tell the newspaper the CEO will probably have to pay financial penalties for undisclosed lapses of judgment in a personal relationship with a female employee. I don't even want to get into the problems with the way the hospital and Levy have handled this disclosure, my colleague Marianne Aiello had her say on that earlier this week, but rather, to discuss whether any leader—no matter how innovative or dynamic—can effectively govern an organization once his or her episode of poor judgment has been revealed. He's apparently going to get the chance to find out.

Levy, a self-described champion of transparency, isn't talking about the matter officially, and neither is the board, so we're left to wonder about the details of his bad judgment. He has, however, apologized to hospital employees in an email, so enough details are there that anyone could fill in the blanks about what likely happened.

As if running a hospital isn't tough enough, some senior leaders seem determined to make it tougher still. Levy's personal failings are Exhibit A, but he's neither the first nor the last leader who has been caught behaving inappropriately. The amazing thing about the story is not that the board is standing behind Levy's leadership—much of the time, public humiliation seems to suffice as the pound of flesh we extract from our leaders (see Clinton, Bill), but sometimes, if not often, these leaders pay with their jobs, not to mention their marriages.

We all have personal failings. It's not my place to judge what Levy did or how he was found out—turns out he was exposed by an anonymous letter—but to remind senior leaders that more is expected of you and that people are watching. Surely those of you in the CEO's chair know that, but in circumstances like this, I really wonder. Further, in a way, I feel bad for him. I'm wondering whether despite all of Levy's successes at Beth Israel Deaconess, his leadership position has become so compromised as to render him ineffective going forward.

He's to be commended for helping to lift the veil on what goes on in a hospital's leadership suite. He's to be celebrated for turning around a hospital that was losing as much as $280 million between 1996 and 2004, when the Levy-led leadership team returned to operating profits.

The hospital's board clearly does not think he will be ineffective in the future, at least at this point, but these things move quickly. But let's spend a little time on this issue. The CEO is the person who must hold everyone else accountable. He's written about a doctor for wrong-site surgery on his blog, for example. Now, he's on the other end of the shame spectrum. He's had to write an ambiguous email of apology—one that sounds like former Yankee Jason Giambi's infamous apology—we guess for using performance enhancing drugs.

Though his apology has been accepted, I doubt anyone's going to make him team captain. Now, with details of the Levy situation coming out in piecemeal fashion, he still has to walk the halls with a painted-on smile—knowing there has to be a lot of snickering going on behind his back. How does he deal with going out of town for business reasons? How does he deal with the eyes upon him when he goes to shake a young woman's hand?

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