David Torchiana, CEO of Partners HealthCare, unexpectedly announces departure
Dr. David Torchiana, the chief executive of Partners HealthCare, has unexpectedly announced his departure, after his push to integrate the sprawling health system encountered rising tensions from other Partners leaders.
Torchiana, 64, told the Partners board Monday night that he will retire at the end of April, after four years leading an organization that is also the state’s largest private employer.
Over the past several months, the opinionated former heart surgeon had stirred internal concerns with plans to expand Partners and rethink the direction of the organization and its flagship teaching hospitals. Disagreements have arisen on a range of issues, from who will control new outpatient clinics to how aggressively the company should pursue out-of-state expansion plans.
Partners, the largest health system in Massachusetts, is the parent of Massachusetts General and Brigham and Women’s — two of the most prestigious hospitals in the nation.
The company on Tuesday confirmed Torchiana’s planned departure after inquiries from the Globe. Torchiana, in a brief statement, said he looks forward to retirement and has “full confidence in the future of our organization.”
“I am fortunate to have worked at MGH and Partners for my entire professional life and to have been given the opportunity to lead us forward at the culmination of my career,” he said.
Partners officials said they will run a national search for a successor — though all of the organization’s past leaders have come from either Mass. General or the Brigham.
The company will undergo a leadership change as it also faces its first serious challenge from a large new competitor. Beth Israel Deaconess Medical Center and Lahey Health are planning to finalize their merger in the coming weeks.
Mass. General and the Brigham formed Partners HealthCare in 1994 to fight back against what its founders saw as the lopsided power of health insurance companies. By bringing together two of the most renowned hospitals in Boston, the parent company was able to negotiate far higher payments for their services. The Partners system has since grown to include thousands of doctors, more than a dozen hospitals, and an insurance business.
Tensions between Partners’ corporate office and its two flagship teaching hospitals have simmered for years. The friction has grown as Torchiana has led what is called a “transformation” effort to cut costs and rethink Partners’ system-wide strategy, according to several people with knowledge of the situation.
The broad initiative involves a series of committees to assess prickly issues such as the governance structure and the brand of Partners and its hospitals. The process has sparked heated debates.
Two of Torchiana’s recent moves in particular have stoked concerns among leaders at Mass. General and the Brigham.
He has pushed to expand aggressively beyond the borders of Massachusetts by working on deals with the two largest health care providers in Rhode Island. Partners is still seeking approval to acquire Care New England Health System of Providence, but it has shelved a more controversial plan to pursue a deal with the Lifespan system in Rhode Island.
In addition, Torchiana rankled other Partners leaders when he began negotiating a possible takeover of Harvard Pilgrim Health Care, the state’s second-largest commercial health insurer. Torchiana told the Globe in November that the merger talks were on hold, noting that a deal would face tough scrutiny from regulators. He also said Partners and Harvard Pilgrim were unsure if they were “functionally organized to be able to pull it off.”
Meanwhile, the presidents of Mass. General and the Brigham, Dr. Peter Slavin and Dr. Elizabeth Nabel, respectively, generally have preferred to stay focused on their core business of providing patient care.
“Hospitals want to run their own show,” one person aligned with Torchiana said on the condition that he not be named. “There’s always this tension that exists. It never goes away. They want Partners to do what they need them to do, but not to go too far.”
Disagreements have also risen over plans for Partners to open several outpatient clinics over the next five years. How those new locations would be branded, and what services they would offer, remain unclear.
Scott Sperling, chairman of the Partners board of directors, said Torchiana — who goes by the nickname “Torch” — has contemplated retirement for some time. He said Torchiana’s four years at the helm is about the average tenure for a Partners CEO.
“It’s a hard job, and Torch has been doing yeoman’s work,’’ he said in an interview. “It’s not without wear and tear.’’
Sperling acknowledged that as Torchiana moved to implement his own vision for the organization, which included greater integration and more care delivered outside the big teaching hospitals, disagreements escalated over strategy.
“There are strong opinions,’’ he said. “These are people who could be the CEO of almost any medical system in the world. We want them to express their strong views. That doesn’t make the Partners CEO job any easier.’’
Torchiana is known as a methodical, data-driven leader with a soft voice and strong opinions. The 6-foot 6-inch Coke-drinking executive, who is a voracious reader, earned praise as a cardiothoracic surgeon at Mass. General, where he became chief of cardiac surgery in 1998. He later served as chief executive of the Mass. General physicians group before replacing Dr. Gary Gottlieb as Partners CEO.
As the head of Partners, Torchiana pushed back against the notion that the nonprofit health system — which state reports have shown to be higher priced than its competitors — is too expensive. He has argued that Partners receives lower reimbursements than its national competitors, and he has noted that health care costs, when compared to incomes, are not especially high in Massachusetts.
Partners has grown under Torchiana — for example, through the acquisition of Massachusetts Eye and Ear in 2018. Last year was particularly profitable for Partners. The company earned $310 million on operations in the fiscal year that ended Sept. 30, 2018, and collected revenue of $13.3 billion.
“Torch understood that Partners and its hospitals had an important community mission beyond the academic and patient care mission,” said Andrew Dreyfus, the chief executive of Blue Cross Blue Shield of Massachusetts, the state’s largest insurer. “He devoted himself to some big, tough issues, like the opioid crisis, and increasing burnout of clinicians, and I think that will be part of his legacy.”
Torchiana earned total compensation of $4.7 million in 2016, the most recent year for which figures are available. That includes a base salary of $2.1 million and other pay.
Torchiana sometimes found himself defending Partners from legislative proposals that would have cost the company financially, including a 2016 ballot campaign by a labor union, 1199SEIU United Healthcare Workers East, to slash insurance payments to Partners. The company and the union later reached an agreement.
“We’ve had a good experience working with Dr. Torchiana, and we wish him well in his next endeavor,” Tim Foley, executive vice president of the union, said in a statement. “Though we’ve had disagreements from time to time, we appreciate his work to improve quality care.”
A Partners spokesman said Torchiana was not available for an interview Tuesday.
The tensions among Partners hospitals have worsened in recent years as Mass. General becomes financially stronger than the Brigham, said Paul Hattis, a professor of public health and community medicine at Tufts University School of Medicine. “Part of the CEO’s job is to keep it in check,’’ he said.
Hattis said this is a chance for a new Partners CEO to say to the Brigham and Mass. General: “Even though we fight with each other, we can’t not figure this out, because we are going to have more viable competition.’’