New England hospital chain Caritas Christi informed negotiators with the Massachusetts Nurses Association last week that it likely will close two of its six hospitals--St. Elizabeth's Medical Center in Brighton, Mass., and Carney Hospital in Dorchester, Mass.--should its deal with New York-based Cerberus Capital Management fall through.
The primary objective of the meeting was to discuss how to deal with Caritas' growing unfunded pension liability, reports the Boston Globe. Caritas executives were trying to secure concessions from the MNA, such as a wage freeze and a promise that roughly 60 nurses would take early retirement in addition to the 90 who already have done so.
Despite serving as the Caritas flagship, St. Elizabeth's would be on the chopping block because it is one of the more financially unstable hospitals in the system. Along with Carney, it serves more low-income patients, but neither make enough off Medicaid reimbursements to cover the full cost of care. What's more, a good portion of employees at both facilities are at the top of their respective pay scales, according to the Globe.
"The fact is that if this deal doesn't go through, everyone knows we have problems," MNA executive director Julie Pinkham told the Globe.
Caritas CEO Ralph de la Torre said when the deal with Cerberus was first announced in March that New York-firm would need to pony up $24 million annually for 13 years to keep the pension fund afloat. The Globe reports that Caritas executives talked about a second recently discovered pension liability of nearly $50 million at the meeting.
Should the deal go through, Cerberus already has agreed to spend as much as $450 million to pay off pension liability and "other system debt."
To learn more:
- read this Boston Globe article
- check out this other Globe piece about union support in favor of the deal