It's official. Caritas Christi Health Care is going to the other side. Now that its sale to Steward Health Care System LLC, a newly formed affiliate of Cerberus Capital Management, L.P. is complete, the Caritas system will operate as the largest for-profit healthcare network in New England, WBUR reports.
As a result, Caritas will get access to much needed capital for upgrading its infrastructure and programs and dealing with pension obligations.
Cerberus, which doesn't have experience buying hospitals--and which, perhaps, is best known for buying an equity stake in Chrysler as it was going down the tubes--gets a hospital system that is nearly $500 million in debt.
If you're wondering what's in it for Cerberus, some hints were sprinkled in the Caritas press release. It looks like Cerberus deal makers are hoping to make money off the healthcare reform by creating a Steward Health Care accountable care organization. Dr. Ralph de la Torre, Caritas CEO, who will stay on, notes that they are "investing in the Caritas hospitals for the long term and building a strong, community-based ACO for Massachusetts."
Current senior leaders at Caritas Christi Health Care will stay in place, according to the Caritas press release. The six Caritas hospitals will continue to deliver care that follows Catholic ethical and religious directives.
Cerberus will take on $495 million in Caritas debt, including unfunded pension obligations for about 13,000 retirees and employees, the Globe reports.
Cerberus has also promised $400 million in capital for infrastructure and technology improvements for the healthcare system, which includes St. Elizabeth's Medical Center in Brighton, Carney Hospital in Dorchester, Norwood Hospital, Good Samaritan Medical Center in Brockton, Saint Anne's Hospital in Fall River, and Holy Family Hospital in Methuen. Steward has also acquired the assets of other CCHC entities, including the Caritas Physician Network, Caritas Hospice and Home Care, Laboure College, and Por Cristo.
To learn more:
- read the Caritas Christi press release
- read the Boston Globe article
- here's the Boston Herald article
- read the WBUR article
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