Help us expand our reach! Please share this article
BRAINTREE -- Following approval by the state's highest court, the sale of Caritas Christi to a for-profit investment firm is set to become final.
On Oct. 29, the Supreme Judicial Court approved the sale of Caritas Christi Health Care, a network of six Catholic hospitals in the greater Boston area under the auspices of the Archdiocese of Boston, to Steward Health Care, an affiliate of Cerebus Capital Management, a private equity investment firm based in New York City.
"Now that the regulatory review process is complete, we have to work on closing the transaction," said Caritas spokesman Christopher Murphy. "When we announced this purchase, we thought we had a good deal for Caritas and a good deal for the state of Massachusetts."
Murphy said the transaction could become finalized within the next few weeks.
According to Murphy, Caritas the transaction has already been approved by the Vatican. The Vatican must approve significant sales of Church assets.
Caritas announced in March that an $830 million deal was underway to sell the hospitals to Steward Health Care, but the agreement had to be reviewed by the attorney general and Supreme Judicial Court before it could go through.
Attorney General Martha Coakley approved the deal on Oct. 6 after a five-month review process after inserting her own modifications.
Associate Justice Francis Spina approved Coakley's modified version of the agreement.
Among the provisions Coakley wrote into the deal were a guarantee that all the hospitals will remain open for at least three years and that there would be no closures the following two years for hospitals that remain profitable.
The attorney general's office also required that Caritas prevent reductions in mental health or alcoholism services, fully fund 13,000 employee pensions and submit to a $1.5 million, five-year review by the attorney general and the state health department.
While the agreement acknowledges that the hospitals' Catholic identity would be preserved, it also contains a termination clause that was untouched by Coakley's office.
The clause stipulates that the hospitals' Catholic identity may be terminated by Steward, or any other future owner, if compliance with Catholic medical ethics and directives is found to be "materially burdensome."
If that happens, however, the owners must pay $25 million to a charity designated by the Archdiocese of Boston.
The agreement comes after a roughly three-year struggle to save the financially struggling hospital network.
Merger talks with Ascension Health, a national Catholic health care system, broke down in June 2007, and later that year, Caritas released findings of a consulting firm's study that recommended governance changes, affiliating with a Catholic health care system, merging with a local non-Catholic hospital or even selling to a for-profit corporation.
Caritas withdrew from a planned partnership with a St. Louis-based insurance company in July 2009 over concerns that the alliance would have forged a state health insurance plan that would have funded abortion and sterilization, procedures which violate Catholic teaching.
In March, Caritas announced the asset purchase agreement with Steward Health Care, and then in September, the hospital chain announced it had acquired Landmark Medical Center in Woonsocket, R.I.
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.