Friday, March 26, 2010
Caritas Christi Health Care System has announced that it will be acquired by Cerberus Capital Management, a New York venture capital firm. The conversion from a nonprofit to a for-profit will depend on approval from state regulators, and that process could take until the fall. The Cardinal of the Archdiocese of Boston must also approve the deal.
Cerberus will provide $830 million to the health care system, to be used for repairs and improvements. Cerberus has agreed to keep the six hospitals in the system open, to follow the tenets of the Catholic Church and carry out its mission of charity care, and to continue employment for current Caritas employees. Cerberus has agreed not to sell the hospitals or take them public for at least three years.
Responses to the announcement have been mixed. The hospitals needed the money and had searched for a partner for two years. The conversion to for-profit status will result in $7 million in property taxes, which will help other economic projects. But some nurses and others have expressed concern about whether a for-profit company will care about patients and provide the charity care that has been part of the Caritas mission. As one nurse said, "How can you call a charity a for-profit?"
Cerberus has promised to continue to set aside $66 million a year for charity care and pastoral care, and the continuation of the charity care that Caritas has provided seems likely to be a condition for approval by the Attorney General, Martha Coakley. This will be General Coakley's first conversation, and as she was quoted as saying, "It's fairly complicated." She must determine whether the conversation is "in the best interest of the public," and then will make a recommendation for or against the conversion to the Supreme Judicial Court of Massachusetts.
The Boston Globe has the story, as well as a number of related posts.