Paul Levy

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Group assignment: Paul Levy: Taking Charge of the Israel Deaconess Medical Center

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Senņikova Irina Dr.oec. asoc.prof.

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1. How would you describe the situation Levy inherited at the BIDMC? What challenges did he face? Why did previous turnaround efforts fail?

To begin with, it is critical to introduce the actors in Levy´s case: The first is the Beth Israel Hospital (BI )– it was established in 1916, it is a high-class academic medical center with a good quality of care. The hospital performed very well for many years. The second party involved is the Deaconess Hospital – this hospital was just as efficient. In contradistinction to BI, the Deaconess Hospital has a different philosophy – it is less an academic medical center but rather puts a greater emphasis on surgical specialties and delivers a high-quality care.

In 1990, Partners Healthcare System (Brigham + Massachusetts General Hospital) was announced. Deans believed in building a larger hospital system and therefore gaining market shares. This merger should provide them with a larger share of the market and warrant them a greater influence with the insurance companies (= business model). These hospitals employed more physicians and care specialists. Several smaller hospitals were added to this merger as well.

Representatives of the Beth Israel Hospital believed that there was a need for competing with Partners Healthcare System, so they decided to merge too. In 1996, there was a new merger of BI + Deaconess + smaller ones (Mt. Auburn Hospital, the New England Baptist Hospital etc.). This new merger was named CareGroup System. BI and Deaconess were completely different types of hospitals. At the beginning of 1996, Mr Rabkin from BI started to run the merger. This resulted in a situation of hostility and...