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Memo to Mass General Brigham: The time is right to keep your hospital chiefs off corporate boards

With new leaders at MGH and Brigham and Women’s hospital, the state’s largest health care network has a perfect opportunity to prohibit executives from cashing in as directors at for-profit companies.

Dr. Anne Klibanski, CEO of Mass General Brigham, has the perfect opportunity to end of the dubious practice of allowing the health care network's hospital chiefs to serve as directors of for-profit companies.
Dr. Anne Klibanski, CEO of Mass General Brigham, has the perfect opportunity to end of the dubious practice of allowing the health care network's hospital chiefs to serve as directors of for-profit companies.Sam Doran/Pool

It’s been just over a year since I tried to shame Boston hospitals for permitting, and even encouraging, their top leaders to moonlight as board members at for-profit companies. It’s a cushy and lucrative side hustle that raises serious conflict-of-interest questions.

The Globe’s Spotlight Team then decided to do more than simply hector from a soap box: It dug into the issue, producing a comprehensive report in April showing that while common in our medical mecca, working as a director for a public company was pretty rare among major-hospital chiefs elsewhere in the country.

Little has changed, until now.

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Mass General Brigham recently hired new leaders for its two flagship Boston hospitals, neither of whom was on a for-profit board in his previous job. The leadership change offers the perfect opportunity for the state’s largest health care network to make clear it takes corporate governance seriously.

The new presidents — Dr. David F. M. Brown at Massachusetts General Hospital and Dr. Robert S.D. Higgins at Brigham & Women’s Hospital — are astoundingly qualified picks. In addition to protecting their hospitals exceptional quality of care, they will be called upon by CEO Dr. Anne Klibanski to meet the Mass General Brigham trustees’ marching orders: Turn this constellation of sometimes feuding fiefdoms into a unified health care system.

Brown and Higgins were told during the selection process that a review of the health care system’s policy on outside interactions, including board work, was underway and they would be bound by any changes made as a result, a person with direct knowledge of the matter told me.

That review, first reported by Liz Kowalczyk of the Spotlight Team, is being conducted for the company by a law firm with expertise in conflict of interest issues, according to the person I spoke with, who said, “We want to know exactly what our peers are doing.”

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Fair enough.

Mass General Brigham, the state’s biggest private employer, wants a detailed understanding of the hospital industry’s best practices before making a decision on board memberships, which it has previously defended as a way to broaden executives’ knowledge of, and connections in, the broader health care world.

But we already know that leaders at most of Mass General Brigham’s peers around the country don’t do for-profit board work.

The Spotlight Team looked at 120 large teaching hospitals, children’s hospitals, and cancer centers outside of Boston, and found only eight were headed by chiefs who also work as directors for a publicly traded company.

Among the other 112 hospitals were the four that placed higher than MGH in the most recent US News & World Report rankings: Mayo Clinic, Cleveland Clinic, UCLA Medical Center, and Johns Hopkins Hospital, where Higgins is finishing his work before joining Brigham & Women’s in December.

In August 2020, Beth Israel Lahey Health was the only local institution to explicitly bar its leaders from sitting on for-profit boards. The company later tweaked its policy, maintaining the prohibition for pharmaceutical and medical device companies, where the potential for conflicts is highest, but opening the door at other types of health care companies.

Even that watered-down policy makes Beth Israel Lahey an outlier nationally. At most hospitals, making small fortunes by serving on a public company board is something that just isn’t done by tradition because, you know, it’s unseemly.

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As I argued a year ago, Boston hospital trustees place too high a value on the benefits of allowing their leaders to collect cash payments and stock awards from companies that may have a motive for being tight with an elite hospital. The public companies get more out of the deal than the hospital, in terms of credibility and connections.

I still believe I was right on that point, but I was wrong when I concluded that nothing would change in Boston.

Today, Mass General Brigham has the chance to set an example. The slate is clean: Brown and Higgins already know they may not be able to cash in like their predecessors did.

If Klibanski and Mass General Brigham trustees take at least the most-conflicted board work off the table, their local rivals would follow suit. Boston Children’s Hospital, Boston Medical Center, Dana-Farber Cancer Institute, and Tufts Medical Center could no longer justify their position by saying, “Hey, MGH does it, too.”

Sorry, Beth Israel Lahey, but Mass General Brigham has more sway than you do.

And a boatload more than I do.


Larry Edelman can be reached at larry.edelman@globe.com. Follow him on Twitter @GlobeNewsEd.