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Caritas Christi to be Acquired for $830 Million

March 26, 2010
by root
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Caritas Christi Health Care (CCHC), a six-hospital system based in Boston, has signed an agreement to be acquired by Steward Healthcare System LLC, a newly formed affiliate of Cerberus Capital Management, in a deal valued at $830 million.

The transaction will cover all pension obligations for current and former Caritas employees, repayment of the system’s outstanding debt, a capital investment to fund operations, and a commitment to approximately $400 million of capital projects, including six major construction projects that will provide immediate upgrades to each of the Caritas Christi hospitals, it says.

The transaction is subject to closing conditions, including approvals from the Massachusetts Attorney General, the Massachusetts Department of Public Health and the Archbishop of Boston.

The purchase agreement also contains the following stipulations that the system will:

  • Remain headquartered in the Greater Boston area;
  • Keep current management in place;
  • Maintain employment levels, and compensation and benefits arrangements;
  • Continue to run the Caritas Christi hospitals as Catholic healthcare providers in accord with the Ethical and Religious Directives for Catholic Health Care Services adopted by the U.S. Conference of Catholic Bishops;
  • Maintain existing policies on community benefits as well as charitable and pastoral care;
  • Maintain medical residency and teaching programs; and
  • Respect the commitments that Caritas has made to charitable donors to the system.

Established in 1985, Caritas Christi is New England’s largest community-based hospital network, providing care to patients in eastern Massachusetts, southern New Hampshire and Rhode Island.

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It sounds like Caritas Christi will honor its contracts. This is not always the case. When Kaiser Permanente sells its hospitals it sometimes breaks its contracts. A case in point is when Kaiser sold its Santa Teresa Hospital in San Jose, CA it broke its contracts with all the independent physicians who were tenants in the hospital. These physicians were forced to move their practices somewhere else at great cost. I helped these physicians to successfully sue Kaiser for breach of contract. Each physician was awarded more than $300,000 to cover their moving costs and losses to their practices.

I HATE to see physicians treated poorly because of corporate self interest. I hope this is not the case with the Caritas Christi acquisition. However, if it is I would like to hear about it and help the physicians make it right. I can be contacted at: GOOD LUCK! Ron Pacholec


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