Cerberus Capital has struck a deal to buy Caritas Christi Health System.
The same Wall Street firm that took over faltering automaker Chrysler only to see it go bankrupt has reached an $830 million deal to buy Caritas Christi Health Care, a financially strapped Catholic hospital system based in Boston.
Why would a nonprofit chain of six hospitals sell itself to Cerberus Capital, a decidedly for-profit investment house named for the three-headed dog guarding Hades? Money.
Member station WBUR in Boston talked with Caritas CEO Dr. Ralph de la Torre, who boiled the deal down to this: "Our major problem right now is access to capital." Caritas needs money to shore up its pension plan, to fix up facilities and modernize.
The deal requires state approval because it would transform Caritas from a nonprofit charity into a for-profit, taxable concern. De la Torre told WBUR he didn't think there would be any issues with that conversion.
Maybe. Maybe not. Paul Levy, who runs Boston's Beth Israel Deaconess Hospital, observed, "This would be the largest switch of hospital assets from non-profit to for-profit status that the state has seen." And Massachusetts, unlike some Sun Belt states, isn't exactly a hotbed of for-profit hospitals.
The chain was created by the Archdiocese of Boston in 1985, and the deal is subject to the approval of the Archbishop of Boston. Under the proposed deal, the system would maintain its Catholic identity.
In 2007, Caritas tried and failed to sell itself to Ascension Health of St. Louis, the nation's largest Catholic hospital chain.