HMS To Drop International Consulting Subsidiary

The University is planning to spin off part of Harvard Medical International (HMI), a major not-for-profit subsidiary of Harvard Medical School, to Partners HealthCare, a non-profit that owns several major Massachusetts hospitals.

Plans for a deal, which have not yet been finalized, were confirmed yesterday by two HMI vice presidents, Thomas H. Aretz and Mehul C. Mehta.

The news comes near the end of a lengthy review process investigating the $21-million-a-year organization’s activities in over 30 countries across five continents.

The review centered on the changing focus of HMI, which has grown solely from medical education consulting to health care delivery consulting as well.

University and Medical School officials involved in the discussions expressed concern that the organization’s activities no longer fully reflected Harvard’s core mission of education and research.

“More and more of what we have become, particularly in the last few years, has involved working with health care delivery systems,” said Andrew A. Jeon, HMI’s acting president and chief executive officer. “That is certainly outside the scope of the University and Harvard Medical School. That drove the discussion.”

Jeon declined to discuss the specifics of the transaction yesterday because details had not yet been made public, but he did confirm that a deal with “a major health care-delivery organization in Boston” is in the works.

Partners, which was founded in 1994 by two Medical School affiliated hospitals, Mass. General Hospital and Brigham and Women’s, recorded revenue of over $422 million in fiscal year 2005, according to tax filings. The company did not return a request for comment late yesterday.

HMI officials contacted yesterday afternoon expressed enthusiasm for the deal, saying the organization’s health care consulting functions were better suited to Partners’ focus.

“A lot of our work is in the domain of health care delivery,” Mehta said. “Clearly the alignment with a hospital delivery system will be much more in line with the type of work this activity entails.”

Mehta and Aretz said the deal had been slated for announcement in mid-March.

HMI’s flagship endeavor, a partnership with the government of Dubai, called Dubai Healthcare City, is a complex that employs over 400 health care professionals and is now set to undergo further expansion, according to HMI’s 2007 annual report.

Vice Provost for International Affairs Jorge I. Dominguez and Jeon both said yesterday that the University would honor all existing contracts involving HMI.

Currently, HMI prominently features its Harvard ties on its Web site, citing the Medical School’s reputation, its 18 affiliated institutions, and the organization’s ability to draw on faculty from schools across the University.

It is not clear what the relationship between the University and HMI would be if Partners takes control of part of the consulting firm as expected.

Medical School Dean Jeffrey S. Flier declined to comment through a spokeswoman yesterday evening.

In an earlier interview, Flier acknowledged discussions were ongoing but declined to discuss them further.

“It’s in a phase of negotiation and discussion that is not public yet, so...I shouldn’t say,” Flier said at the time. “HMI is being evaluated for where it fits relative to Harvard’s mission and the Medical School’s mission.”

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