Dr. David Torchiana will take the helm at Partners HealthCare, as the Boston-based system charts a new business course following a state judge's ruling blocking its planned acquisition of three hospitals. The not-for-profit health system announced last week that Torchiana will succeed outgoing CEO Dr. Gary Gottlieb.
Torchiana, a cardiac surgeon, inherits an organization grappling with losses from its entry into the health plan business and embroiled in conflict over its aggressive expansion. Partners ended last year with an operating loss of $21 million on revenue of $10.9 billion. Its insurance losses contributed to a January downgrade from Moody's Investors Service.
In an interview, Torchiana said Partners is reviewing its options in light of the court ruling rejecting its agreement with the Massachusetts attorney general's office that would have allowed the acquisitions in return for price caps. He said Partners is “chastened” by the decision and the opposition expressed by the state's new attorney general, who told the court she would work to block the acquisitions.
“We got the message very clearly,” Torchiana said. “We need to step back and … figure out what to do.”
Partners Board Chairman Edward Lawrence praised Torchiana in a news release on his appointment. “Dr. Torchiana possesses the instincts and the political savvy to be an outstanding leader for Partners,” he said.
Gottlieb, Partners' CEO since 2010, is leaving to lead not-for-profit Partners in Health, which provides medical care in Haiti, Peru and other countries.
Torchiana currently heads the Massachusetts General Physician Organization, a Partners subsidiary that employs 2,400 doctors at Massachusetts General Hospital. His start date at Partners' will be decided in March, the system said.
Torchiana said Partners will seek to turn around the poor financial performance of its Neighborhood Health Plan. It acquired the plan, which serves Medicaid, exchange and commercial enrollees, in 2012. The insurer covered 330,300 people last year, up 25% from the prior year, as the federal health law expanded Medicaid eligibility. But the new enrollees needed more costly medical care than expected, Torchiana said.
Turning around recent damage to Partners' public image might take longer, he said. “We have definitely become a target for a fair amount of attention. “That is not a great, comfortable place to be.”
