Letter to Attorney General Martha Coakley from Health Care for All

8/8/2019 Letter to Attorney General Martha Coakley from Health Care for All

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September 21, 2010

Attorney General Martha CoakleyOffice of the Attorney General100 Cambridge StreetBoston, MA 02114-2509

RE: Caritas Christi/Cerberus Proposed Transaction

Dear Attorney General Coakley:

We are writing to express our serious concerns with the rapidly moving process

for government approval regarding the proposed purchase of the non-profit

Caritas Christi Health Care System (Caritas) by Steward Healthcare System LLC

(Steward), a subsidiary of the Wall Street private equity firm Cerberus Capital

Management (Cerberus). While we understand the desire of the proponents to

move this sale forward quickly, we urge you to conduct this review in a

deliberate, transparent, and inclusive manner.

As you are aware, this proposed conversion is unprecedented in the

Commonwealth. This complex transaction involves the states second largest

hospital chain and tenth leading employer. The sale could impact access to vital

services in many communities and has far-reaching implications for the future of

the states healthcare system. News reports detail Cerberus interest in

purchasing as many as six additional hospitals to add to their network.

Given the stakes for the Commonwealth and its citizens, we are concerned about

the rush to approve such a complicated transaction. Community-based groupshave articulated a set of issues and concerns that they would like addressed to

protect and enhance the health care services that these community hospitals

provide. Other transactions involving the sale and conversion of single non-profit

to for-profit hospitals, both in Massachusetts and in other states, have been

evaluated and approved on a much more extended timeframe.

We urge you to make sure this approval process provides all stakeholders with

the time and opportunity to have a dialogue with the proponents of the deal and

government officials about the deals impacts.

We also ask you to make public for review the information, data, and analysis

that your office and hired consultants have compiled over the past three months;

to require Steward to provide a detailed business plan and how it will spend its

proposed $400+ million of capital investment for public comment and analysis;

and, to provide the public a forum to provide feedback with this new information.


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The six community hearings held in rapid fire succession in June and July of this

year provided limited opportunities for true engagement between the community

and the proponents. These hearings were held even though Steward still has not

submitted 60 of 64 appendices referenced in its Transaction Summary and Asset

Purchase Agreement and the findings from the independent review undertaken

by the AG remain unavailable to the public.

It should be acknowledged that Steward/Cerberus ownership of the Caritas

network brings with it many risks. As a private equity fund, Cerberus bottom line

obligation is to its investors, not to the Commonwealth, or to the patients in the

communities served by the Caritas system. Cerberus, like many other private

equity funds, has a track record of saddling acquisitions with debt while

extracting significant returns for itself and investors. Cerberus history is marked

by abandonment of poorly performing companies without regard for community

impact. In this case, Cerberus is entering an industry where it has no experience,

and is placing itself in a fragile situation where the consequences of failure andabandonment could be life threatening. Cerberus need to produce investment

returns raises real concerns about the potential for its financial success to come

at a great cost to Massachusetts healthcare system.

The proposed sale would remove the Caritas hospitals from public ownership,

potentially impacting access to essential health services for our states poorest

residents while having far reaching implications for the future of Massachusetts

healthcare system. We urge the Attorney General to make available to the public

the Cerberus financial and business plan, the remaining appendices, and the

information that your office has gathered over the past three months. Patients,community organizations, and Massachusetts taxpayers have the right not just to

be heard quickly, but to have the time and access to materials to fully engage in

the public comment process.

We look forward to speaking with you. Please contact Matt Wilson at Health Care

For All at 617-275-2940 or [email protected].

Sincerely,

Amy Whitcomb Slemmer, Executive Director

Health Care For All

Health Access CoalitionLawrence General HospitalSignature Healthcare Brockton HospitalSouthcoast Hospital Group

Matt Selig, Executive Director

Health Law Advocates
mailto:[email protected]:[email protected]


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Dan Driscoll, Chief Executive Officer

Harbor Health Services

Rob Restuccia, Executive Director

Community Catalyst

Representative David Torrisi

Representative Steven DAmico

Senator Susan Tucker

Senator Patricia Jehlen

Allan Rodgers, Executive Director

The Massachusetts Law Reform Institute

Al Norman, Executive Director

Mass Home Care Association

Laurie Martinelli, Executive Director

NAMI Mass

Sheldon H. Barr, President and Chief Executive OfficerHealth Imperatives

Sheila Casey, Executive Director

Neighborhood Legal Services, Lynn/Lawrence

Carol Trust, Executive DirectorNational Association of Social Workers (NASW-MA Chapter)

Juliana Langille, Executive DirectorCommunity Connections of Brockton

Lucinda Williams

Dorchester House Governing Board

Elizabeth Saville, President

Brockton Interfaith Community

Glen Ohlund, Director

Self Help Community Development Corporation

Greater Brockton CHNA Steering Committee

Karen Hall, Director

Stoughton Youth Commission


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Cc: David Spackman, Division Chief Non-Profits/Public Charities Division

Documents

Letter to Attorney General Martha Coakley from Health Care for All