(NECN: Peter Howe, Boston) From Roman Catholic and non-profit, to private-equity and for-profit, with no layoffs and no change in their religious orientation and tradition and commitment to serving all: That's the promise behind the 830 million dollar bid for Caritas Christi Health Care System.
The deal, unveiled Thursday, would involve six hospitals: St. Elizabeth's in Brighton, Carney Hospital in Dorchester, Saint Anne's in Fall River, Holy Family Hospital in Methuen, Norwood Hospital, and Good Samaritan Medical Center in Brockton. The hospitals employ 13,000 people and serve over 600,000 patients annually.
The overall deal sounds almost too good to be true to many Caritas employees and medical-industry observers. While taking on all pension and debt obligations, Cerberus is promising to pump $400 million into upgrading and expanding the hospitals -- including nearly 120,000 square feet of new hospital space -- while converting the hospitals to a for-profit status that subjects them to paying local property taxes. All that while "maintaining employment levels and compensation and benefits arrangements" and complying with all ethical and religious directors of the U.S. Conference of Catholic Bishops.
"Naturally, I'm a little suspicious of it,'' said Linda Barton, an intensive-care nurse at Caritas Norwod Hospital. "I think people do like to say everything's going to be hunky dory, perfect, we're going to maintain this, we're going to add this.''
"We're, I think, cautiously optimistic that it will improve the hospitals' financial base so that we are able to expand, add some needed services,'' Barton said. But she adds, "Where are they coming up with this money, in this environment, in this economy, that they'll be able to promise all that? It's a little nerve-wracking.''
Karen Cavagan, a perioperative surgery nurse at Good Samaritan, said, "We're skeptical. They don't have, at least from what we've been told, a lot of experience with a hospital. " (Cerberus, which manages $23 billion in assets, is known as a super-secretive investment fund whose most prominent deal, taking over the car maker Chrysler, ended with Chrysler's bankruptcy.)
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Caritas CEO Dr. Ralph de la Torre insists: Believe. "We believe that the key in Massachusetts is really a low-cost, community provider, high-quality great, great care at a lower cost.'' Cerberus money, he says, can make Caritas work financially and religiously. "In order to get to the next level, in order to really build an integrated system, you have to spend money, and right now -- especially in the non profit sector -- the money just isn't there. So we went out and we found a partner that believes in us and that believes in our vision and our mission.''
"They understand that being part of the church, having an identity that is Catholic, is also part of who we are,'' de la Torre said.
"We're going to have wonderful facilities,'' de la Torre continued. "We're going to have state-of-the-art medical equipment right in patients' back yards.'' De la Torre predicted that after the deal has closed, Caritas employees "will have a new spring in their step" because of the condition of the hospitals will be so substantially improved.
Cavagan said she welcomes more investment. "We desperately need a new E.R. We, out of all the Caritas hospitals, we see the most patients in the emergency room.'' Other nurses note that there is literally a rut worn in the floor from decades of nurses walking through the aged facility.
Betsy Prescott, a cardiology care manager at St. Elizabeth's who has been there for 33 years -- including her three years training in nursing school -- said she hopes ownership by deep-pocketed Cerberus will help fund better publicity to inform people about high-ranked Caritas programs like its cardio and maternal programs. "They have developed some amazing programs, but the community doesn't know that.''
The Cerberus Caritas takeover will require approval from some powerful authorities of both church and state: Cardinal Sean O'Malley and Attorney General Martha Coakley, as well as the state Department of Public Health.
Prescott said she hopes the review process will ensure the hospitals do not lose their Catholic orientation and identity. "Our mission in the Catholic health care system has been always to open our doors to everyone. We will care for everyone,'' Prescott said.
Linda Barton said she has passed up chances to move to higher-paying jobs in Boston because she wants to work as a nurse in her community. Ultimately, whoever owns the hospital, what's most important to her and thousands of other Caritas employees is that "I go to work every day to provide really good care for my patients and their families. That's what I do. That's what I want to continue to do.''
