Dear Colleagues:

After several years of near break even operating performance, BWH was able to move forward with a modest positive margin in FY 2001. As many of you know we have set strong and aggressive targets for FY 2002 so that we can continue to pursue the essential mission of this academic medical center.

Through the first six months of this fiscal year, I am pleased to report that the hospital has generated new momentum with a strong operating gain and we have reset our operating margin target to $34 million for this year. While this is indeed welcome news, there is much work at hand. A positive margin will allow us to reinvest in the physical plant in a way that has been long deferred through the years of break even operations. This is essential to our future, as is the rebuilding of our cash reserves to weather the challenges of the new economy.

While our operating story is very strong, we remain concerned about non-operating income. This is mostly generated by investments and fluctuations in the stock market continue to impact our ability to realize gains.

Overall, however, we are proud of the operating performance of the hospital during very difficult times and commend each of you for your dedication to our mission. I can assure you that we have not lost sight of the notion that the success of this hospital is founded upon your efforts to make this an exceptional place for our patients to receive care.

Sincerely,

Andy Whittemore, MD
Chief Medical Officer