News & Events

Scrutiny of Caritas sale urged

Coalition asks regulators to take it slow, add limits

By Robert Weisman, Globe Staff

More than 20 community groups, health care providers, and lawmakers are calling on state regulators to slow the approval process for the proposed acquisition of Boston-based Caritas Christi Health Care by a New York private equity firm.

In letters being sent today to Attorney General Martha Coakley and Public Health Commissioner John Auerbach, the coalition, organized by consumer advocacy group Health Care for All, urged officials to review the sale of Caritas to Cerberus Capital Management in a “deliberate, transparent, and inclusive’’ manner.

“Cerberus’ need to produce investment returns raises real concerns about the potential for its financial success to come at a great cost to Massachusetts’ health care system,’’ the letter reads.

Caritas spokesman Chris Murphy said the letters’ signers represent a small minority compared with the hundreds of people who have gone public to support the sale. “Dragging out the review process and jeopardizing the sale is irresponsible,’’ Murphy said. He warned the “financial survival’’ of Caritas, its 12,000 employees, and 13,000 pensioners hinges on state approval of the Cerberus buyout.

The letter asks Coakley’s office to make public all the information and analysis its researchers and consultants have compiled over the past three months. The office will recommend whether the Supreme Judicial Court of Massachusetts should let the nonprofit Caritas hospital chain convert to an investor-owned company.

The letter also calls on Auerbach’s office, which would have to issue new licenses for the six Catholic hospitals, to take more time to craft “licensing conditions’’ to protect public health and consumers.

It also asks state officials to require the new Cerberus holding company, Steward Health Care System LLC, to provide a detailed business plan on how it expects to turn a financially struggling hospital system into a money-making business.

In addition, the coalition wants the state, which held a half-dozen public hearings on the transaction last summer, to host a forum at which feedback can be offered on the business plan.

Cerberus has said it plans to invest $400 million to make improvements at the six Caritas hospitals in eastern Massachusetts: St. Elizabeth’s Medical Center in Brighton, Carney Hospital in Dorchester, Norwood Hospital, Good Samaritan Medical Center in Brockton, Saint Anne’s Hospital in Fall River, and Holy Family Hospital in Methuen.

“The meat of this whole process is how they’re going to spend that money,’’ said Matt Wilson, campaign director at Boston-based Health Care for All, who organized the coalition. “It’s important to know so we can be sure that consumers will continue to have accessible and affordable health care.’’

While Health Care for All and Caritas lawyers have talked, the advocacy group is seeking to meet with top Caritas officials to discuss their business plan, Wilson said. Caritas officials, however, said the hospital system has reached out to discuss the deal with Health Care for All, but the group hasn’t responded.

Murphy said the review process has been underway for seven months and that the deal has won the backing of dozens of community groups, mayors of the communities where Caritas hospitals are located, five US congressmen, and Senators John F. Kerry and Scott Brown.

“Without the capital provided by this sale, Caritas Christi cannot remain viable,’’ Murphy said. Recalling that a like-sized Catholic hospital system in New York closed because of a lack of money and unsustainable debt, he said, “A similar outcome in Massachusetts would be devastating to health care access in the community.’’

Cerberus managing director Timothy F. Price said its policy is not to comment on matters under regulatory review.

The letters to Coakley and Auerbach come less than a week after a group of competing hospitals called on Coakley’s office to recommend a number of strict conditions on the sale. They ranged from prohibiting the buyer from using improper incentives to recruit doctors from rival hospitals to lengthening from three to seven years the time Cerberus must commit to not selling Caritas.

That group, the Healthcare Access Coalition, signed the letters being sent today. Also signing were other health care providers, community groups, and four state legislators. Several of those who signed said they didn’t oppose the proposed sale, but wanted more information.

“We want to slow down a bit, take a deep breath, and get the questions answered,’’ said Daniel J. Driscoll, president of Harbor Health Service Inc., which runs Dorchester and Mattapan health centers that refer patients to Carney. “This is the time to do that. Once the deal is approved, the state has less ability to influence what happens.’’

Neither the attorney general’s office nor the Department of Public Health has disclosed its timetable for ruling on the Caritas transaction, but decisions had been expected this fall.

Melissa Karpinsky, a spokeswoman for the attorney general’s office, said it would consider all public comments.

Public Health Department spokeswoman Julia Hurley said her office couldn’t comment on the letter because it hadn’t see it.

New hospital licenses would need the approval of the state Public Health Commission. The commission is next scheduled to meet Oct. 13, but the Public Health Department has yet to post an agenda for that meeting.

At the public hearings over the summer, the majority of speakers — including Caritas hospital employees, mayors, lawmakers, and other community leaders — supported the proposed sale.

“The people actually doing the work and delivering the care at Caritas support this merger and stand with the overwhelming majority of community members, advocates, and elected officials who have said it should be approved without unnecessary delay,’’ said Veronica Turner, executive vice president of Service Employees International Union Local 1199, which represents workers at Caritas hospitals.

Robert Weisman can be reached at