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Dozens lend their support to Caritas sale

By Megan Woolhouse and Robert Weisman
Globe Staff / June 9, 2010

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BROCKTON — Dozens of community leaders, employees of Good Samaritan Medical Center, and politicians voiced support for the sale of Good Samaritan’s parent, Caritas Christi Health Care, to a New York private equity firm at a two-hour public hearing last night.

Mayor Linda Belzotti of Brockton said the change is a necessity that keeps “a local hospital local’’ through outside investment.

Only a few at the hearing raised concerns about the sale of Caritas to Cerberus Capital Management, which needs approval from state government officials.

“Under new ownership, the likelihood that they will continue to answer to the community in any real sense is diminished,’’ said Gene Wallace, interim chief executive for Signature Healthcare Brockton Hospital, another community facility.

But the majority of those who spoke backed the plan to convert the Boston-based Caritas chain of six nonprofit Catholic hospitals to for-profit businesses, citing the dire need for investment capital that will enable the hospitals to upgrade their facilities. The new ownership group has also pledged to retain their Catholic identities.

“As a Roman Catholic, I strongly support this because of the Catholic affiliation,’’ said Robert Sullivan, an at-large city counselor and a Caritas Good Samaritan board member. “In putting on my city counselor hat, it makes sense. We need this money.’’

More than 100 people attended last night’s public hearing at Manthala George Jr. Elementary School. In addition to Good Samaritan, Caritas owns St. Elizabeth’s Medical Center in Brighton, Carney Hospital in Dorchester, Norwood Hospital, St. Anne’s Hospital in Fall River, and Holy Family Hospital in Methuen. Most of the hospitals serve cities and towns with large low-income populations.

The hearing was the first of a half dozen scheduled before staff members of Attorney General Martha Coakley’s office and the state Department of Public Health over the coming month. The attorney general’s office will make a recommendation to the Massachusetts Supreme Judicial Court, which would have to approve any conversion of a nonprofit to a for-profit entity. The public health department would have to approve new licenses for each of the Caritas hospitals under Cerberus.

Under the acquisition agreement, unveiled March 25, the private equity firm plans to invest $830 million in helping the hospitals shed debt and make major capital improvements.

It would be the first Cerberus investment in hospitals. But the existing Caritas management, led by chief executive Ralph de la Torre, who attended last night’s hearing, would continue running the community hospitals while also seeking to expand the franchise in Massachusetts and nationally.

Cerberus has promised to keep the chain’s 12,000 employees and not to sell the hospitals or take them public for at least three years.

It has also signed a stewardship agreement with the Archdiocese of Boston pledging to maintain the Catholic identity of the six hospitals. But the deal contains an escape clause that would allow the owner to end the religious affiliation in exchange for a $25 million donation to charity.

Megan Woolhouse can be reached at mwoolhouse@globe.com; Robert Weisman can be reached at weisman@globe.com.