The Medical School’s profitable subsidiary has expanded to more than 30 countries on five continents, partnering with hospitals and universities in such locations as Taiwan, Paris, Dubai, and Athens.

This is the second article in a two-part series.
See part one, The Contentious Rise of HMI

It was 2003, and Harvard Medical International was having a banner year.

With the approval of then-University President Lawrence H. Summers, the Medical School’s non-profit subsidiary was striking the deals that laid the groundwork for skyrocketing revenues in the ensuing years.

To its backers, HMI was succeeding spectacularly at the mission, set by founder Medical School Dean Daniel C Tosteson ’46, “to do good by doing well.”

But the heady days came to an abrupt halt after Summers’ controversial remarks on women in science and a fierce battle with the faculty that would eventually force him from office.

Into the power vacuum stepped administrators who viewed HMI’s forays into the wider world of health-care consulting in a wholly different—and considerably more critical—light.

According to longtime HMI President Robert K. Crone, it “became clear” following Summers’ departure that the organization’s ambitious activities “would not continue to be supported by the University.”

To the administrators who filled the void, projects like the Dubai Healthcare City—a sprawling partnership between HMI and the Government of Dubai—signalled a worrisome drift in the subsidiary’s mission.

In addition to the fears that HMI’s engagement in health-care consulting was far removed from its research and educational mission, the University’s leaders worried that the organization was diluting Harvard’s zealously-protected brand by transferring its name to hospitals abroad.

Despite the efforts of its founders and staunchest backers within the Medical School, the battle to keep HMI within Harvard was tipped against them after Summers left office.

The administrators who were critical of HMI would soon achieve the sought-for split between the University and the organization—a move slated for mid-March.

LEAVING A VOID

At the start of Summers’ tenure, HMI’s board counted among its membership several of the University’s key leaders, including the vice president for finance, the general counsel, and three members of the Harvard Corporation—the University’s top governing body.

But Summers steadily drew control of HMI into his own office by removing University administrators from HMI’s board, thus making himself the go-to person for HMI’s interactions with the broader University, according to Crone.

This concentration of authority left what Crone termed a “knowledge void.”

“When Dr. Summers left,” Crone writes in an e-mailed statement, “there was no one in the central administration who had any real experience regarding HMI.”

But the void didn’t last.

While Summers was fighting battles with the faculty, the Office of the Provost—under the leadership of Steven E. Hyman—was tripling in size, growing from five deputy administrators when Hyman took over in 2001 to 15 today.

Additionally, the University began creating subject-specific review committees for areas like science and engineering in order to provide advice and oversight for Harvard programs.

One such body—the University Committee on International Projects and Sites (UCIPS)—was vested with the authority that had once been within Summers’ purview.

The committee was charged with reviewing all proposals for international projects, with a particular emphasis on those that employed Harvard’s name.

And so when Jorge I. Dominguez assumed the newly-minted position of vice provost for international affairs—and with it, the UCIPS chairmanship in 2006—the responsibility of overseeing HMI fell to him.

“There was a set of activities that I was supposed to look at,” Dominguez says, “and HMI is big.”

EXPLORING THE OPTIONS

In the wake of its mammoth contract in Dubai, scrutiny of HMI intensified, and central administrators called for an external review of the organization.

But former Medical School Dean Joseph B. Martin, who nominally ordered the review, did not take happily to the idea of an analysis that might recommend moving part of the organization outside the Medical School, according to people involved in HMI.

“Joe was immersed in the organization all along and very supportive of its efforts,” says Tosteson, Martin’s predecessor as dean and an HMI Board member.

Still, the review went forward—despite Martin’s concerns—and when Dominguez arrived at his new office in the Holyoke Center, the report was put before him.

To Dominguez, the reports implication was unambiguous: HMI had drifted dangerously far from Harvard’s core missions and needed to be jettisoned.

PROTECTING THE BRAND

Beyond HMI’s drifting mission, the issue that set off alarm bells among University leaders was apprehension over the potential abuse of the Harvard name.

While HMI was authorized to use the Harvard brand in specific ways, Dominguez says, that didn’t give it carte blanche to bestow Harvard’s name on clients.

“There was a division of opinion [over] whether we wanted the seal of the University to be on the Web page or the front door of another entity,” Dominguez says. The University didn’t want to give “the impression that here you were walking into a department of the Harvard Medical School on the Boston campus.”

Administrators became increasingly concerned with the licensing of Harvard’s brand name to HMI clients in places thousands of miles from Boston.

Institutions like the Asan Medical Center in Seoul, Korea and the Wockhardt Hospital in Bangalore, India featured signs and buildings with the shield of Harvard or the Medical School.

     

But despite the growing concern over branding, Crone says that no members of the University’s leadership approached him to take up the issue.

“University presidents, provosts, and deans had visited many of HMI sites over the years without ever officially expressing concern to me or to any of my staff,” Crone writes.

THE WRITING ON THE WALL

In 2006, HMI was planning to move into new offices and was in negotiations to sign a ten-year lease.

But the University’s leadership—knowing that a split between HMI and Harvard was growing increasingly likely—vetoed the long-term lease, according to Crone.

Seeing the writing on the wall, HMI’s board authorized the organization’s management to hire McKinsey & Company to help map out the subsidiary’s options.

McKinsey’s assessment explored several potential models for HMI, including determining how it would fare as a part of another health-care delivery organization, according to individuals who were privy to the report’s details.

Because of the creation of UCIPS, the committee dedicated to reviewing Harvard’s international programs, the University had a body ready to study the report and act on its recommendations.

“When the report arrived, all of a sudden there was someone to give it to,” Dominguez says. “It is conceivable that had the external review been commissioned [without UCIPS involvement] it might have sat on a shelf.”

It didn’t.

EXECUTIVE DECISION

According to both Crone and Tosteson, the decision to spin off HMI came swiftly—and, in their view, without sufficient consultation with the board or the Medical School’s leadership.

“As far as I am aware no one of HMI’s management nor board were involved,” Crone writes.

In fact, Crone and Tosteson say that Mass. Hall administrators exploited a leadership void at the Medical School in order to push through their agenda.

“The final disposition of HMI was conducted during the interregnum between [the tenures of] Dean Joseph Martin and Dean Jeffrey Flier,” Crone writes.

Martin, a champion of the organization, stepped down last year after ten years at the helm of the Medical School, but his replacement, Flier, did not assume the deanship until the decision had already been made.

Hyman presented the HMI deal as a fait accompli to Flier, according to Crone. (Flier was unavailable for comment, according to a spokesman.)

Soon after learning of the decision to transfer parts of HMI to Partners HealthCare, a major health-delivery organization, Crone stepped down and took a job offer from Huron Consulting Group.

Tosteson attributes Crone’s departure to the University’s decision to “disassociate” him from the program.

“[Crone] came to the conclusion that, for reasons he didn’t understand, he was a persona non grata,” Tosteson says.

While Dominguez acknowledges that there was opposition to the move, he adds that Harvard had no option but to cut part of HMI loose.

“HMI itself is not an educational entity,” Dominguez says. “The more you let those sentences roll through your mind, whether your name is Dominguez or Martin [you realize that] maybe this belongs somewhere else.”

THE NEW CENTRALIZATION?

Dominguez says that even though he and his committee were of the opinion that parts of HMI should go, their primary work is in broadening Harvard’s international focus. He points to one of his committee’s recent initiatives—a $1 million dollar project geared toward South Asia—as an example.

“This is the ‘One University’ theme,” Dominguez says, adding that this philosophy increasingly guides Harvard’s efforts.

A similar University-wide committee, with a $50 million grant, now seeks to foster centralization for science and engineering. And current University President Drew G. Faust announced last fall that Harvard’s social science departments would get a dedicated committee of their own.

But HMI’s backers worry that the trend toward centralizing Harvard’s international efforts—given that it has meant spinning off part of HMI—will lessen Harvard’s impact abroad.

“We are entering into an era of [globalization], and that’s as true in medicine as it is in business and law,” Toseteson says. “We need to have a policy of how, and how much, Harvard will choose to organize its efforts in dealing with the reality that globalization is here to stay.”

—Staff writer Clifford M. Marks can be reached at cmarks@fas.harvard.edu.
—Staff writer Nathan C. Strauss can be reached at strauss@fas.harvard.edu.