After a five-month long review of the planned sale of the Caritas Christi Health Care system to Cerberus Capital Management, Attorney General Martha Coakley has brokered a deal that gets her endorsement. No stakeholders will be completely satisfied with these results. Issues some thought important were left out of the deal – not addressed are the fears of community hospitals of “for-profit” predatory behavior that could hurt their ability to provide health care services locally. There is also no provision for a charitable foundation but $1.5 million must be set aside for public oversight and monitoring. However, the pensions of 13,000 employees and retirees are to be fully funded – the six-hospital system must remain open for at least for five years and Caritas must continue its mental health and alcoholism services.
Some comments –
From the Herald editorial page: This transfer is no formality. Hospitals originally founded by religious orders to provide health and pastoral care to the needy will become for-profit ventures, in a deal designed ultimately to enrich Cerberus’ investors. But the alternative is a padlock on the hospital doors.
From Ralph de la Torre – Caritas Christi CEO: It’s probably on the edge of what Cerberus is comfortable with, but that’s OK. It benefits our patients, employees and pensioners and tremendously benefits the communities.
From the AG’s report: “It is impracticable, if not impossible, for Caritas to continue to operate as a public charity.’’
Methuen Mayor Bill Manzi: Good news for Methuen financially, as well as from a health care perspective.
Dianne J. Anderson, chief executive of Lawrence General Hospital, said in a statement that Cerberus ownership would “create uneven playing fields for community hospitals throughout the state.’’
From AG Martha Coakley: This will help us assure that we have the intended consequences of this merger but not the unintended consequences. We want to provide for an infusion of capital that would allow these hospitals to stay open and flourish.
While the deal appears to be done – the Court – for transfer of assets and the Department of Public Health – for a license to operate – still need to have a say. But in reality getting the AG’s blessing was the biggest hurdle. There will be fall-out. It will be political as well as medical, financial, social and more. All stakeholders will keep a vigilant eye on the roll-out of this new partnership – most vigilant will be the Attorney General herself. Stay tuned.
(Sources used: the Herald, the Globe, the AG’s report and Mayor Manzi’s blog.)