With one of the six Caritas Christi Health Care facilities – Holy Family Hospital in Methuen – such an important Merrimack Valley institution, I’ve posted frequently about the role of Attorney General Coakley in the proposed purchase by Cerberus Capital Management – a New York private equity firm Cerberus. The editorial in today’s Globe highlights the pluses and cautions as the AG’s review continues.
On one hand the Globe editorial notes:
There are good reasons to support the proposed sale of Boston-based Caritas Christi Health Care to New York private equity firm Cerberus Capital Management. In addition to protecting over 12,000 in-state jobs, Cerberus has promised to pay off the non-profit hospital chain’s debt, permanently secure employees’ pensions, earmark $100 million for hospital renovations and expansions, create up to 4,300 new jobs, and increase the system’s footprint by 117,000 square feet.
On the other:
In essence, Cerberus believes that by improving the facilities and services at Caritas hospitals, it will be able to attract a large number of patients who currently leave their communities to patronize faraway facilities in Boston. But it’s unclear whether this potential boost in patient volume could net Caritas hospitals enough money to satisfy Cerberus’s investors. And what if it doesn’t? Will Caritas raise prices? Cut services? Close facilities? Cerberus is asking for a stake in Massachusetts’ fragile ecosystem of community hospitals, and if it stops providing certain services, there would be a domino effect on other hospitals. With that in mind, the firm should have already shared a detailed business plan with the public. Since it hasn’t, the attorney general should make those plans public as a part of the approval process.
As noted – the AG’s review gives the best opportunity to really assess the safeguards for the community – the public who uses the system and the public fall-out if the Cerberus plan fails. Madame General – take the time, proceed with a cautious eye and get the best deal for the patients and the community – they too have a vested interest in this “non-profit” to “for-profit” deal.
Read the full Globe editorial here.
My disclosure – I have been an in and out patient at Holy Family Hospital (formerly the Bon Secour) and a supporter of its mission for nearly 40 years. I’m headed to HFH next week . I have a personal vested interest in the success of this project – “much to gain but also much to lose.” mps