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Massachusetts health care — wonky, with a healthy dose of reality

AG Mandates Consumer Protections in Sale of Caritas

AG Mandates Consumer Protections in Sale of Caritas

October 7, 2010

Seven months ago, when the proposed sale of the Caritas Christi hospital network to Cerberus Capital Management was announced, many were concerned about how Cerberus, a Wall Street private equity firm with no experience running a hospital, would manage the state’s second-largest hospital network.

Health Care For All immediately partnered with a network of state and local advocacy and service groups and worked hard to engage the public to help consumers better understand the intricacies of the sale to Steward Health Care System LLC, an affiliate of Cerberus. We testified at public hearings in each of the six hospital communities (Fall River, Brockton, Norwood, Dorchester, Brighton, and Methuen). At these hearings, during face to face meetings with state and hospital officials, and in written testimony to the Attorney General and Department of Public Health, we emphasized the need to place conditions on the deal to better protect consumers, and ensure that care at these hospitals would be accessible, high quality and affordable.

Attorney General Martha Coakley listened to our concerns and added a number of conditions to the deal increasing consumer protection and providing vigorous oversight of the deal. The current deal is a considerable improvement over the original proposal.

  • Steward/Cerberus will extend from three to five years its commitment to not close any of the six hospitals. In addition, closure of a hospital can only occur if a hospital has lost money for two consecutive years and goes through an 18-month review process;
  • Steward/Cerberus will maintain the current number of behavior health beds, including inpatient psychiatric care and detoxicification hospital beds, for at least five years;
  • Steward/Cerberus must implement the Attorney General’s Community Benefits program, which includes conducting Community Health Needs Assessments every three years;
  • Steward/Cerberus will pay $1.5 million to fund an independent monitoring program. This program, which will be managed by the Attorney General and the Department of Public Health for five years, will allow government and health care watchdogs to document and evaluate the operations of Steward/Cerberus and their impacts on health care costs and services;
  • The conditions of the deal, including commitments to Community Benefits, charity care, will transfer to any potential new owners of the hospital network;
  • Steward/Cerberus will comply with the Attorney General’s recommended Hospital Debt Collection Practices;
  • The Attorney General will continue to have oversight authority on the hospital’s practices.

Health Care For All worked with a network of state and local advocacy and service groups to advocate that consumer protections be made conditions of the sale. Among those groups are Health Law Advocates, Community Catalyst, HESSCO Elder Services, Harbor Health Services, Dorchester House Multi Service Center, Brockton Community Health Network Area (CHNA), Massachusetts League of Community Health Centers, Mass Home Care Association, Massachusetts Law Reform Institute, National Alliance on Mental Illness - Massachusetts, Health Imperatives, Neighborhood Legal Services, Lynn/Lawrence, Greater Boston Legal Services, Brockton Interfaith Community, Self Help Community Development Corporation, Partners for A Healthy Community – Fall River, and the Stoughton Youth Commission.

In these unchartered waters — no non-profit hospital network of this size has ever converted to for-profit status in Massachusetts before, and the deal will affect approximately $1 billion worth of health care services annually — we’re encouraged with the oversight provisions mandated by the state. Meanwhile, an influx of hundreds of millions of dollars to fund a depleted pension plan and update aging facilities is good news for the thousands of employees of the Caritas network. As the conditions of this sale are implemented in the months and years to come, Health Care For All will continue to monitor the hospitals and the communities they serve, and engage health care consumers impacted by this sale.

Health Care For All will closely monitor the impact of the sale of the six-hospital network, which provides nearly $1 billion worth of medical care annually in the state of Massachusetts.
-Matthew Wilson