HMS Spin-Off Will Drop Harvard Name

The segment of Harvard Medical International (HMI)—Harvard Medical School’s non-profit consulting subsidiary—that the University plans to transfer to Partners HealthCare will have to drop Harvard from its name at the end of 2012, according to an official familiar with the negotiations between Partners and Harvard.

The two parties preliminarily agreed to the time period in a letter of intent, the official said, adding that the spin-off will retain the Harvard brand-name until the end of 2012. The actual name of the new firm, the creation of which is slated to be announced in mid-March, has not been finalized.

Plans to spin off part of HMI were confirmed by two of the subsidiary’s vice presidents, Thomas H. Aretz and Mehul C. Mehta, last week.

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

University and Medical School spokesmen declined to comment on the details of the agreement, saying negotiations were still ongoing. Partners HealthCare did not return requests for comment over the weekend.

Partners, which was founded in 1994 by two Medical School-affiliated hospitals, Massachusetts General and Brigham and Women’s, recorded revenue of over $422 million in the year ending September 2005.

News of the agreement came near the end of a lengthy review process examining HMI’s activities in over 30 countries and across five continents. HMI, also founded in 1994, brought in $21 million in revenues in the year ending June 2007.

The review of HMI centered on the changing focus of the organization, whose activities have expanded from medical education consulting to include health care delivery consulting. In recent years, HMI has often aided clients in the construction of hospitals and other facilities.

University and Medical School officials involved in the discussions have expressed concern that the organization’s activities no longer fully reflect 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, in an earlier interview. “That is certainly outside the scope of the University and Harvard Medical School. That drove the discussion.”

Jeon and Vice Provost for International Affairs Jorge I. Dominguez both said Wednesday that the University would honor all existing contracts involving HMI, including its agreement regarding the flagship Dubai Healthcare City, a major health-care complex in the Middle East. The partnership with the government of Dubai employs over 400 health-care professionals and is set to undergo further expansion, according to HMI’s 2007 annual report.

HMI officials contacted last week 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.”

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