News & Events

AG’s limits on Caritas deal don’t go far enough

IN HER decision this week to support the sale of Caritas Christi Health Care to the private-equity firm Cerberus Capital Management, Attorney General Martha Coakley didn’t go far enough to protect the future of the state’s health care system.

Ideally, Coakley would have pressed Cerberus to explain how it plans to convert the struggling nonprofit hospital chain into for-profit facilities without using predatory measures that will disrupt the state’s fragile system of health care facilities; she would have convinced Cerberus to extend the time during which the firm must operate the hospitals to at least seven years; she would have demanded to know the terms of Caritas CEO Ralph de la Torre’s compensation; and she would have insisted that the state retain the power to review the hospital chain’s operation after the sale.

She didn’t. Instead, Coakley added a handful of conditions to the sale that, in the end, seem unlikely to restrict the chain in any significant way. For example, Coakley extended the period during which Cerberus will not be able to sell or close any of its hospitals from three to five years. But Cerberus has room to ignore the extension for a hospital that loses money two years in a row — a distinct possibility for any facility in transition to a new business model. Also, the attorney general mandates that Caritas maintain the number of inpatient psychiatric and detoxification beds in its hospitals, but the deal doesn’t specify how many of those beds must be filled or whether they’ll be available to patients without lavish insurance plans. Finally, Coakley requires Cerberus to pay for a $1.5 million, five-year study that will monitor the conversion, but the deal also grants Caritas the ability to review and comment on that report before it is made public. With each of these conditions, the attorney general has provided Cerberus with enough wiggle room to ignore whatever it chooses.

The Massachusetts Public Health Council and the Supreme Judicial Court of Massachusetts must review the proposed sale before it can go through. Neither should view Coakley’s recommendation as an encouragement to rubber-stamp the deal. Both should look at it with fresh eyes and feel free to add conditions if they deem it necessary.