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AG is examining Caritas Christi finances

Coakley expresses concern for viability of Carney Hospital

Attorney General Martha Coakley is examining the finances of Caritas Christi Health Care and its troubled hospital in lower Dorchester, Caritas Carney Hospital.

"We are looking at the Caritas Christi system," Coakley said. "Like many people in the Carney Hospital service area, we are concerned about its viability." Her office oversees nonprofit institutions, including hospitals.

"The system as a whole causes some concern to us," Coakley said. "It's always of concern when a nonprofit has an operating record that's negative and appears to be getting worse."

Carney Hospital's finances, which have been marginal for many years, have recently taken a downturn.

Inpatient volume is down about 10 percent from last year, and new services and equipment such as state-of-the-art imaging haven't been able to make up the difference. Through the first six months of fiscal 2007, Carney lost $1.6 million.

The hospital's net assets - the value of its assets less liabilities - declined from negative $11.4 million in September 2006 to negative $15.6 million as of March 2007. Carney Hospital lost $2.3 million in the fiscal year ended Sept. 30, after receiving a $4 million state subsidy and a $6.7 million cash infusion from Caritas Christi.

The six-hospital Caritas Christi system, the second-largest in New England, is also struggling. It expects to post a razor-thin profit of $1.5 million for the 12 months ended Sept. 30. It is predicting a profit of $18 million in the current fiscal year.

Terrence Donilon, a spokesman for the Archdiocese of Boston, which owns Caritas Christi Health Care, said representatives for the church are planning to meet with the attorney general's office next week.

"We are puzzled by the timing of this announcement," Donilon said in an e-mail, "since we requested and have been granted a meeting with the attorney general's office for this coming Wednesday to present Caritas Christi's three-year business plan. Wednesday's presentation . . . will reveal stable financial performance projected for the next several years."

Caritas Christi officials said inpatient volume at Carney Hospital and at the system's flagship, St. Elizabeth's Medical Center in Brighton, are both running ahead of expectations for the month of October, a possible sign of a turnaround.

Yesterday, a broad array of officials met in Dorchester to discuss the hospital's future. They included US representatives Michael Capuano and Stephen Lynch, state Senator Jack Hart, state representatives Linda Dorcena Forry and Martin Walsh, and Boston City Council president Maureen Feeney.

"Carney Hospital is an economic engine in the Dorchester community and provides a critically important service to a diverse population of families in our city," the officials said in a joint statement. Their goal, they said, "is to ensure that Carney Hospital remains a vibrant part of this community."

Feeney also met Thursday with Senate president Therese Murray.

Two efforts to sell Caritas Christi to large Catholic healthcare systems failed this year. But the archdiocese said it will not consider a sale to a for-profit chain.

"The idea that the archdiocese would sell Caritas to a for-profit system - it's not going to happen," said Father Bryan Hehir, cabinet secretary for social service ministry for the archdiocese. "The position of the archdiocese is that we do not intend to sell either the Caritas system as a whole or any of its parts to a for-profit entity," he added.

Since talks with other healthcare systems ended, Caritas Christi has been shoring up its management team. Mark Rich, an insider, has been named chief financial officer, effective Nov. 5. The current chief financial officer, Bob Guyon, has been named president of St. Anne's Hospital, the Caritas Christi hospital in Fall River.

Dr. John B. Chessare, interim president and chief executive of Caritas Christi, said he is seeking the permanent position. Caritas Christi has restarted a search process for a leader following the breakdown of affiliation talks in September. It hopes to make a selection within two to three months.

Jeffrey Krasner can be reached at krasner@globe.com.

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