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For-profit Saint Vincent Hospital may offer peek at Caritas future

DORCESTER — In the Saint Vincent Hospital chapel, a candle in red glass glows on the altar, signifying the presence of the host in the tabernacle beside it. The bishop of Worcester sits on the hospital’s board, whose meetings begin in prayer. The hospital does not perform abortions, tubal ligations, or vasectomies, in accordance with Catholic teachings.

But Saint Vincent is not run by the church. Its corporate owner, Vanguard Health Systems of Nashville, has made a fortune converting nonprofit hospitals to for-profits, and it has committed to maintaining Saint Vincent’s religious identity — much as Cerberus Capital Management, the private equity firm, has pledged to do if it acquires Boston’s Catholic hospital network, Caritas Christi Health Care.

Caritas and Cerberus are drafting a stewardship agreement with the Roman Catholic Archdiocese of Boston, detailing how the six Caritas hospitals’ Catholic identity will be preserved. Some details remain unclear, including when the deal will be complete.

But Saint Vincent offers a window into what Catholic health care under corporate ownership can be. It also sheds light on a national debate about whether for-profit Catholic health care is an oxymoron, or whether profitability and religious mission can be integrated.

“I think there has been an evolution in our thinking on these issues,’’ said James A. Donahue, an ethicist and president of the Graduate Theological Union in Berkeley, Calif. “Religiously, ethically, and theologically, as well as economically and financially, we have become a lot more nuanced.’’

Caritas’s leaders make a strong case that it is possible to strike a balance. Christopher Murphy, a spokesman for the network, said the stewardship agreement would be designed to permanently maintain the hospital’s Catholic identity. That is significant because Cerberus may not be the owner for long; the investment firm often buys underperforming companies, turns them around, and then sells them at a profit.

Murphy said the stewardship agreement, which he said will be made public, may be terminated under unusual circumstances — for example, if the archdiocese no longer wants to be involved as a consultant or adviser. He said he could not specify what conditions would permit a termination, however, until the agreement is complete.

“The main point is that it’s designed to last forever,’’ he said. “That’s the prevailing hope of everyone involved, that . . . the Catholic tradition of Caritas Christi stays in place forever.’’

Timothy F. Price, managing director of Cerberus, said the company is not interested in changing the hospitals’ religious identity.

“We’re not going to do the day-to-day operations of the hospitals, and we wouldn’t change the philosophy of the hospitals,’’ he said.

Cardinal Sean P. O’Malley, who is considered by the Catholic Church to be responsible for the Catholic identity of the Caritas hospitals, has expressed support of the proposed acquisition of Caritas by Cerberus, but he declined to comment further for this story.Continued…

At its heart, the stewardship agreement will commit Caritas to strictly adhere tothe Ethical and Religious Directives for Catholic Health Care Services agreed to by the US Conference of Catholic Bishops. The directives lay out the principles of Catholic health care — respect for human life from conception until natural death; care for the poor; contribution to the common good — and explain how health care institutions should put them into practice. The directives prohibit medical procedures that the church considers morally wrong, including abortions, sterilizations, certain fertility treatments, and euthanasia.

In addition to complying with the church’s ethical guidelines, Caritas will promise to maintain its current level of spending on charitable services, Murphy said. In 2009 the six Caritashospitals spent $66 million: $37 million on charitable care for the uninsured and underinsured, $26 million on community benefits such as support groups and skin cancer screenings, and $3 million on “mission’’ spending such as pastoral care. Murphy also noted that Caritas, which is currently exempt from taxes as a nonprofit, will also pay an estimated $100 million in state and local taxes over the next five years if it is acquired by the for-profit firm.

“The services we provide now are determined by our current executive leadership . . . and that leadership is not changing,’’ Murphy said. “They strongly believe in our hospitals’ playing an integral role in the community we serve. That is not going to change because our tax status changes.’’

Fourteen years ago, Saint Vincent in Worcester was in a similar position to that which Caritas Christi finds itself today — desperately hurting for capital and in search of a corporate partner. Saint Vincent was acquired by a for-profit company, OrNda, which in turn was bought by Tenet Healthcare Corporation.

Vanguard purchased Saint Vincent in 2005. The company is made up primarily of nonreligious hospitals, but owns several Baptist hospitals and is in talks to acquire two other Catholic hospitals in the Chicago area. Saint Vincent is now prospering, with a profit margin of 4 to 5 percent, its leaders say.

A visitor to the hospital no longer sees the Sisters of Providence, who founded the hospital in 1893, skimming the halls in dark habits, as they did decades ago. But the hospital’s Catholic culture persists. The gift shop sells plastic rosary beads and statuettes of saints. Small crucifixes hang on the wall over the clock in each patient’s room. A photo of Worcester Bishop Robert McManus is on display in the chapel.

Under a stewardship agreement between Saint Vincent and the Worcester diocese, the bishop can veto any proposed sale of the hospital. He can also revoke the hospital’s right to use the name “Saint Vincent’’ and dissociate the church from the hospital if the Catholic directives aren’t followed. But that seems unlikely to happen under Vanguard. Monsignor Peter Beaulieu, a priest on staff at Saint Vincent, said the company has overseen an era of “Catholic rebirth’’ in which the hospital’s religious identity has become increasingly visible to the public.

“You can have a mission you tolerate, or one you embrace,’’ he said.

Saint Vincent chief executive John Smithhisler says there is much evidence of the hospital’s continuing Catholic identity. As an example, he pointed to a large Angelus bell on display in the lobby. Decades ago it pealed three times daily, calling Catholics in the neighborhood to prayer. The hospital is now raising money to install the bell atop its current building, built justa decade ago.

Smithhisler suggested such symbols can help the hospital attract patients in a two-hospital city with a large Catholic population.

“This is a constant reminder of who we are,’’ Smithhisler said. Residents “walk in here and they see this is a Catholic facility.’’

But some see this as window dressing. The nurses union, which has clashed repeatedly with hospital management, says Vanguard’s relentless focus on profitability has undermined patient care. In 2008, the hospital had 25 serious medical errors or accidents, more than any other in the state.

“It’s not only incompatible with the Catholic mission, it’s incompatible with providing truly high-quality patient care,’’ said Marie Ritacco, a recovery room nurse who has worked at Saint Vincent since 1983. “Decisions are made based on their bottom line, which is always profit.’’

But the hospital’s management says that Saint Vincent improved its safety record last year, reporting only five serious problems, and argues that some other institutions are less scrupulous about reporting errors. Saint Vincent also says it complies with its publicly posted staffing ratios, which are written into the nurses’ contract, and that no member of the nurses union filed an unsafe staffing complaint for any of the 25 errors in 2008.

Worcester’s mayor, Joseph C. O’Brien, praises the hospital’s commitment to community care. Saint Vincent is one of 16 hospitals statewide that have an especially high share of poor patients. The hospital also pays more than $1 million in property taxes and close to $1.3 million in sales taxes, and spends about $2.3 million on free care and almost $300,000 on other community benefits and sponsoring local events, according to a 2008 filing with the state attorney general’s office.

“Ideologically, I had a lot of concerns about for-profit health care,’’ O’Brien said. “But . . . I find it’s hard to make a case that they are not doing a good job serving the community.’’

Skeptics remain. Kathleen M. Boozang, an associate dean and professor at Seton Hall Law School, sees a “fundamental dissonance’’ between the work of the church and for-profit health care institutions, which she says are more likely to focus on profitable services at the expense of those that benefit poor communities, and are more likely to leave urban areas when the going gets tough.

“Ultimately Catholic entities live by their mission, and their mission . . . requires them to make sure their assets are used to the benefit of the hospital and its patients,’’ she said. “The point of a for-profit is to make money for investors.’’

But John M. Haas, president of the National Catholic Bioethics Center, says a carefully written stewardship agreement could go a long way toward heading off the risks of such a deal. It could, for example, require an annual audit of all medical procedures to make sure the hospital follows the Catholic directives, or spell out that the CEO would lose his job if the hospital did not maintain its level of charitable care.

“I don’t think profit is a bad thing in and of itself,’’ he said.

Donahue, the Graduate Theological Union ethicist, agreed.

“Corporations have missions;corporations have cultures,’’ he said. “The most successful are those that . . . provide a good product at a reasonable price. It’s not profitability at all costs.’’

Lisa Wangsness can be reached at