Hospitals Pressured on Caritas

Chloe Gotsis

Brighton, Mass. — Hospitals want Attorney General to set up rules for sale of Caritas to Cerebus By Chloe Gotsis Allston / Brighton TAB Posted Sep 17, 2010 @ 05:26 PM A group of three hospitals in eastern Massachusetts have appealed to the Massachusetts Attorney General’s office to impose conditions on the sale of the Caritas Christi Health Care system to Cerebus Capital Management. Included in the Caritas chain, which is currently owned by Archdiocese of Boston, are Norwood Hospital and St. Elizabeth’s Medical Center. The opposing Healthcare Access Coalition, made up of Lawrence General Hospital, Southcoast Hospitals Group and Signature Healthcare Brockton Hospital, says it is concerned about unfair competition. Donald K Stern, a Boston lawyer representing the Healthcare Access Coalition, sent a 12-page letter to the head of the attorney general’s public charities division on Sept. 15 outlining a laundry list of concerns the coalition has with the sale, including whether the New York-based private equity firm buying the hospital group would use its dominance in the market to fix prices, potentially causing a jump in healthcare premiums. The sale of the Caritas group by the Catholic Church would change its status from nonprofit to for profit. The Healthcare Access Coalition is imploring the AG’s office to impose restrictions on Cerebus, including a three-year ban on raising the prices of hospital services. The letter also asks the AG’s office to prohibit Cerebus from using “improper” means to entice physicians from competing hospitals and use open bidding for contracts. But Chris Murphy, a spokesman for the Caritas Christi hospital group, said the sale of the hospital could reduce costs over the long-term by improving facilities and technology to attract new patients. “This acquisition will enable us to provide better patient care, improve our facilities and incorporate the latest medical technology into our hospitals,” said Murphy. “That is a huge benefit for the Caritas Christi communities. If we can use this technology to provide more efficient care and attract more patients, this could potentially lower our costs to the state.” Murphy said the proposed transaction currently includes a three-year guarantee that there will be no layoffs. Murphy said under the proposed transaction, Cerebus would provide capital to the hospital system and all hospital management currently at Caritas Christi will remain in place after the sale. “The staff will stay and physicians will stay,” he said. “Nothing about this transaction will change who is providing care.” Murphy also noted that under the proposed transaction, costs would not increase to patients of the Caritas Christi hospitals. Will Keyser, a spokesperson for the Healthcare Access Coalition, said he could not immediately comment on the letter. Peter Duda, a spokesman for Cerebus, said via e-mail that as a matter of policy, Cerebus does not comment on matters currently under review. The attorney general’s office and the state Department of Public Health are involved in a regulatory review process of the sale. The Archdiocese of Boston must also approve the sale. According to the attorney general’s office the office and Caritas Christi held six public hearings on the sale at each one of the six hospitals: Norwood Hospital in Norwood, Good Samaritan Medical Center in Brockton, St. Elizabeth’s Medical Center in Brighton, St. Anne’s Hospital in Fall River, Holy Family Hospital in Methuen and Carney Hospital in Dorchester. Jill Butterworth, a spokeswoman for the attorney general’s office said that she could not comment on the letter sent by the Healthcare Access Coalition, but that all “all public comments are welcome and are being considered as the office considers this important review.” The Caritas Christi health system filed its formal notice of the proposed transfer of the system to Cerebus on May 6. The attorney general’s office will look at applicable non-profit and charities laws, procedural due care, management of conflict of interests and fair, reasonable compensation and whether the sale is in the best interest of the public, according to a press release. Murphy said there is no current timetable for the sale. Buterworth said the attorney general’s is continuing to take public comment. Comment can be e-mailed to the attorney general’s office at sent in the mail to Attorney General’s Office, Non-Profit Organizations/Public Charities Division, Attn: Sara Rau, Caritas Transaction Review, One Ashburton Place, Boston, MA, 02108. Once the attorney general’s office completes the review process it’s findings will be prepared and issued. Staff writer Chloe Gotsis can be reached at 781-433-8339 or at Copyright 2010 Allston/Brighton TAB. Some rights reserved Hospitals want Attorney General to set up rules for sale of Caritas to Cer... 1 of 2 9/21/2010 12:29 PM