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BRAINTREE -- After a lengthy process, the Archdiocese of Boston says it has reached an agreement with a venture capitalist firm that will keep hospitals of the Caritas Christi Health Care afloat as well as maintain their Catholic identities.
On April 30, the archdiocese and Caritas Christi Health Care, which operates six Catholic hospitals in the archdiocese, reached an agreement that ensures the Caritas Christi hospitals will retain their Catholic identity once the transaction transferring ownership of the Caritas Christi system to Steward Health Care is finalized.
Steward is the recently-formed affiliate of Cerberus Capital Management, the investment firm that is purchasing the hospitals’ assets for $830 million this year.
“The Stewardship Agreement memorializes Steward’s commitment to maintain the Catholic identity of the Caritas Christi Healthcare system and its fidelity to the mission of the Church’s healthcare ministry,” Father Richard Erikson, the archdiocese’s vicar general and moderator of the Curia, said in a May 6 statement announcing the agreement.
“The transaction with Steward will provide the system much needed capital for its infrastructure, programs and pension funds while continuing to provide high quality healthcare in accord with the Ethical and Religious Directives for Catholic Health Care Services adopted by the United States Conference of Catholic Bishops (USCCB),” he continued.
The agreement is pending final approval by the state public health department and attorney general, as well as the Vatican. This summer, F. Beirne Lovely, General Counsel for the archdiocese, said the state agencies will conduct their reviews of the agreement and will hold joint hearings in each community in which a hospital is located. The attorney general’s office will present the agreement to the state judicial court for approval.
Lovely also said this deal must be approved by the Vatican since it involves the sale of Church property. No timeline is available for the Vatican to deliver its disposition.
The agreement is meant to be permanent, according to Christopher Murphy, spokesman for Caritas Christi.
Murphy also said the hospitals will still provide the same scope of services it currently features.
“Really, nothing changes in how we deliver care,” he said. “We follow the ethical and religious directives now. This ensures we’ll continue to do what we’re doing now.”
The stewardship agreement, which is available on the state attorney general’s website, upholds components of the ethical and religious directives recently released in its fifth edition by the USCCB.
Father J. Bryan Hehir, the archdiocese’s health and social services secretary, said that the ethical and religious directives provide the framework by which Catholic health care operates in the United States. They include sacramental and pastoral care for all patients regardless of religious denomination as well as contain key social justice components and bioethical provisions aimed at preserving the sanctity and dignity of human life.
The recently-signed agreement between the archdiocese and Steward provides that the Archbishop of Boston will oversee that the Caritas hospitals run in accordance with the bishops’ directives. The agreement allows the archbishop to have final authority in disputes involving the directives.
The agreement also allows the hospital to maintain its existing ethics committees, and allows the archdiocese to hire its own medical ethicist. Additionally, the hospitals can still provide chapels, employ chaplains, and display Catholic imagery.
“This is a substantive and structural commitment by the archdiocese and Steward to operate this hospital system by the religious and moral directives of the Catholic Church,” said Father J. Bryan Hehir.
The agreement may be terminated by the archdiocese if it finds the hospitals are not being run according to Catholic practices. However, the archdiocese must provide 90 days notice for Steward to correct the problem.
Conversely, Steward would also be allowed to opt out of the contract if complying with the bishops’ directives is found to be “mutually burdensome.” Murphy said that clause was inserted into the deal in case future medical advances hampered efforts to comply with Catholic directives.
“It shouldn’t be looked at as something where we foresee it’s going to happen,” Murphy said. “It’s in place if something like that happens. We can’t predict where medicine will go.”
In most cases, Steward must make a $25 million donation to a charity of the archbishop’s choosing that is publicly recognized by the state attorney general if the contract is terminated. Also, if Steward transfers ownership of one hospital or part of the assets, they would pay one-sixth of $25 million to a charity.
Termination would also result in the elimination of Catholic names, imagery, and facilities from the hospital.
However, Murphy said, Steward would not have to pay a penalty if the agreement is terminated because a change in the law requires hospitals to provide services that violate the bishops’ directives.
About three years ago, the Caritas network and the archdiocese began to explore ways to address the hospitals’ financial struggles. Talks with Ascension Health, a national Catholic health care system, broke down in June 2007. In November 2007, Caritas’ corporate team released results of a consulting firm’s report in a letter published in the Nov. 5, 2007 edition of The Pilot that suggested options such as governance changes, affiliating with a national Catholic health care system, merging with a local non-Catholic hospital, or a sale to a for-profit corporation.
In July 2009, Caritas withdrew from a proposed partnership with a St. Louis-based insurance company over concerns that the alliance would have forged a state health insurance plan that provides procedures like abortion and sterilization, which violate Catholic social teaching.
Earlier this year, Caritas announced that Cerberus will provide $830 million to fund operations and capital projects, assume pension obligations for current and former employees, and pay down Caritas’ debt.
Established in 1985, Caritas Christi is the second largest healthcare system in New England. Included in the system’s network are Caritas St. Elizabeth’s Medical Center of Boston, Caritas Carney Hospital in Dorchester, Caritas Good Samaritan Medical Center in Brockton, Caritas Holy Family Hospital and Medical Center in Methuen, Caritas Norwood Hospital and Saint Anne’s Hospital in Fall River.
“We’re very pleased that the acquiring enterprise has committed so forcefully to the continued Catholic identity of these hospitals,” Lovely said.