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	Impact of Case on Healthcare System Unclear By Liz Kowalczyk Boston Globe May 22, 2006 http://www.boston.com/business/healthcare/articles/2006/05/22/ impact_of_case_on_healthcare_system_unclear/ Since taking over as chief executive two years ago, Dr. Robert M. Haddad has begun to turn around the financially precarious Caritas Christi Health Care System, but the accusations of sexual harassment against him could threaten that improvement, hospital finance specialists said yesterday. The Catholic Archdiocese of Boston could find itself in a no-win situation regarding the hospital network, they said, because Haddad's behavior may hurt the system's reputation, distract staff from their mission, and disrupt the system's rebound, regardless of whether Cardinal Sean P. O'Malley continues to stand by Haddad or asks him to step down. The situation is particularly problematic because it follows a tumultuous change in chief executives at Caritas Christi two years ago; O'Malley fired longtime leader Dr. Michael Collins for undisclosed reasons before appointing Haddad. In March, Moody's Investors Services upgraded the outlook on Caritas Christi from negative to stable and credited a major cost-cutting program led by Haddad for keeping the system on budget for the fiscal year 2005 and producing a $22.6 million operating profit. "They just turned the corner on things," said Martin Arrick, an analyst for Standard & Poor's, an investment rating company that also rates Caritas Christi. "And the last management change was not the easiest thing. What you need is an effective CEO at the helm. The question is, is his effectiveness in some way compromised? If it has been, it suggests a change is necessary. But that's a judgment you have to make." Brandeis University health policy professor Stuart Altman said it is hard to know what is best for the Caritas Christi system -- whether Haddad stays or leaves. It is difficult to replace a good hospital chief executive, he said, which may have influenced O'Malley's decision to reprimand but not dismiss Haddad. And, Haddad has made significant improvements in the system's finances, largely by laying off employees and consolidating management. "I do think this partly could be a business issue," Altman said. "If a person wasn't doing a good job, why take the slings and arrows?" Altman said he does not believe Haddad's behavior will scare off patients, who generally decide where to seek medical care based on their doctors' place of practice, referrals, and the overall quality of the hospital. But "on the other hand, how do people feel about working for him now?" he said. Another healthcare specialist said Haddad's behavior could hurt his ability to hire top women executives, or even draw female residents to work at St. Elizabeth's Medical Center, the system's flagship hospital and a Tufts Medical School teaching hospital. Despite its large size -- the system includes six hospitals -- and religious significance, Caritas had lost millions annually since 2000, with the exception of 2003. In April 2004, the system underwent significant turmoil. O'Malley ousted Collins, and immediately replaced him with interim president Emmett C. Murphy, a healthcare consultant whom O'Malley had hired to evaluate the system and who was advocating for changes. But soon after, Murphy disclosed his departure after Globe reporters asked him to explain several discrepancies in his official biography. O'Malley then hired Haddad to oversee the system's rebound, a job that is clearly not done. In its recent evaluation, Moody's said the system continues to suffer from declining hospital admissions, which will make continued success difficult in coming years if savings can no longer be realized by cost-cutting. Arrick said Standard and Poor's would step up surveillance of Caritas Christi. "This is a huge distraction for the system," he said. Liz Kowalczyk can be reached at kowalczyk@globe.com.
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