Caritas has a plan, is open to talks

Boston officials led by City Council president Maureen Feeney are asking the Archdiocese of Boston to cut Caritas Carney Hospital loose from the Caritas Christi Health System so it can look for a buyer on its own.

The elected officials say Caritas Christi has mismanaged the struggling Dorchester hospital. As a stand-alone hospital with a strong owner, they say, Carney could make long-delayed capital improvements, allowing it to be more competitive and continue its commitment to serving low-income and immigrant residents. And without the drain of the underperforming Carney, the Caritas Christi system might also be healthier, they say.

In addition to Feeney, the group includes state Senator Jack Hart, Democrat of Boston, and Representatives Linda Dorcena Forry and Martin J. Walsh, both Democrats of Boston. They met last week with Dr. Daniel O'Leary, president of Carney Hospital, to discuss the hospital and its importance to Dorchester.

"Is the archdiocese committed to Carney's success?" asked Hart. "If they are, they have to let it partner with somebody. Carney is not going to survive on its own."

Separately, Mayor Thomas M. Menino said he has asked a group of healthcare industry analysts to examine Carney Hospital's finances and operations and recommend a course of action to him next week. Menino said he is unsure whether Carney will be able to continue operating as an acute care hospital, a facility that treats all but the most complex cases.

"I'd love to save it, but if you can't save it, what's the reality of the situation?" he said.

The Globe reported last week that an internal Caritas Christi budget planning memo said Carney Hospital would be "insolvent" without a $6.7 million cash infusion it recently received from other hospitals in the chain. The hospital also received $4 million in state aid. Despite the financial help, Carney estimates it lost $2.1 million in the fiscal year that ended Sept. 30.

The elected officials said they want to meet with top officials at Caritas Christi to discuss Carney's future, but have not yet requested a meeting. A spokesman for the six-hospital chain said it "welcomes the opportunity" to meet with city and state legislators.

"We want to know what their plan is for Carney Hospital," Forry said. "It's not enough for them to just drag it along and then sell it when they're ready."

In an e-mail to the Globe, Dr. John B. Chessare, interim chief executive of Caritas Christi, said the chain has no plans to sell Carney "at this time."

"To the contrary, Caritas is implementing a three-year strategic plan at Caritas Carney designed to return the hospital to financial health, a plan that is showing very early signs of success," Chessare said.

Under the plan, Carney hopes to break even in the current fiscal year. But that outcome depends on improved operations and an anticipated $2.6 million legal settlement.

Last year, the archdiocese asked a management consulting firm to consider options for Caritas Christi, the state's second-largest hospital chain. In addition to Carney, the system includes flagship hospital St. Elizabeth's Medical Center in Brighton and St. Anne's Hospital in Fall River, Good Samaritan Medical Center in Brockton, Holy Family Hospital in Methuen, and Caritas Norwood Hospital. The church has not made the consultant's report public.

The church then attempted to transfer ownership of the system and its $275 million debt to two successful Catholic healthcare chains, Ascension Health of St. Louis and Catholic Health Initiatives of Denver, but was unable to reach a deal with either system.

Since talks with Catholic Health ended in September, the archdiocese has renewed efforts to find a permanent chief executive for Caritas Christi. It has been without a permanent leader since May 2006, when Dr. Robert M. Haddad was forced to resign amid allegations he sexually harassed female employees.

Healthcare executives at other Massachusetts hospitals said several hospitals could conceivably merge or form some kind of a partnership with Carney. A few cited Boston Medical Center, which also serves many uninsured lower-income residents, as a natural partner.

Another possibility is Partners HealthCare System Inc., the state's largest hospital chain, which includes Massachusetts General Hospital and Brigham and Women's Hospital in Boston. Thomas P. Glynn, chief operating officer of Partners, said the chain has already examined Carney's finances in case it is called upon for advice. He said it is "using any publicly available financial information to get a complete picture of Carney's finances." But he added that Partners is not planning to buy Carney.

The Daughters of Charity, an order of Catholic nuns, founded Carney Hospital in South Boston in 1863. It moved to its current location in lower Dorchester in 1953. The Daughters of Charity wanted to sell the hospital in 1996 and came close to a deal with a secular hospital system that would have maintained Carney's religious identity by prohibiting abortions and other procedures incompatible with Catholic beliefs. Cardinal Bernard Law blocked the deal and ultimately negotiated a sale to the Caritas Christi Health System for $11.7 million.

But Caritas Christi did not make good on promises to invest in modernizing Carney's facilities. In 1999, the chain said it would use part of the proceeds from a state-sponsored $200 million bond offering to construct a $15 million cancer center. The facility was never built. Caritas Christi's most significant investments in Carney have been made recently, including a magnetic-resonance imaging machine and a cardiac lab for stent procedures.

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