Caritas Sale Closes
Seven months after they initially shook hands, Caritas Christi Health Care, the state's second largest hospital chain, officially closed its sale to an affiliate of Cerberus Capital Management, a New York private equity firm.
The deal culminates a four-year odyssey for Caritas to find a buyer to financially support its operations. While much discussion and energy has been put into the deal’s structure and financing, how the new owners business plan as a for-profit hospital plays out over the next three to five years will tell if for consumers, this was the right deal to make.
The Caritas chain of community hospitals provides a virtual lifeline to the communities of Brighton, Dorchester Fall River, Brockton, Methuen and Norwood, not only as a major employer, but as hospitals providing accessible and low cost health care.
The question remains whether the new owners can deliver on its pledge to “become a model for high-quality, low-cost, community-based health care”, while meeting the new financial obligations of paying taxes and delivering significant returns for their institutional investors.
Because of conditions Health Care For All pushed to include in the deal, consumers will be in a great place to monitor the deal and assess the chain’s process. Caritas is now required to commit to run these hospitals for at least five years, an increase from their initial pledge of three years, and maintain the current number of behavioral health beds. In addition, $1.5 million has been set aside to independently monitor the operation of the new owners, analyzing the cost, quality and accessibility of care.
As community hospitals, this sale provides is an opportunity for Caritas to expand its reach into the community. Throughout the public hearing process, residents voiced the need for more investment in community health programs to address issues such as diabetes, obesity, and various other public health issues. Caritas is in a unique position to be an innovator and leader on these issues. In addition to investing in bricks and mortar for new ER rooms, let’s hope they invest in the great work being done in the communities by health centers and other non-profits.