FALL RIVER – Caritas Christi Health Care, which owns St. Anne’s Hospital and is in talks to buy Woonsocket’s Landmark Medical Center, has been sold by the Archdiocese of Boston to a private equity firm for $830 million, officials announced Thursday.
Cerberus Capital Management LP, a New York-based manager of private equity and hedge funds with about $23 billion in assets, plans to convert the hospital system from a nonprofit organization to a for-profit business.
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Caritas President and CEO Ralph de la Torre and his management team will remain in place, the companies said.
Landmark, which has been in receivership since 2008, received court approval last September to negotiate a merger with Caritas Christi. R.I. Attorney General Patrick C. Lynch said Thursday that Caritas is still exploring whether to acquire both Landmark and its sister institution, the Rehabilitation Hospital of Rhode Island.
“The announcement that Caritas has found a private equity investor is a new development that will provide Caritas with access to capital to help maintain and improve its hospitals,” Lynch said in a statement. He added: “I look forward to the day when Landmark will be a free-standing hospital, independent from the special mastership, and flourishing.”
Officials said the takeover would be good for St. Anne’s. “There will be more construction and expansion of the facility than any time in the history of the hospital,” Caritas Christi Chief Operating Officer Robert Guyon told The Herald News on Thursday.
The purchase, which Caritas executives said has the support of Mass. Gov. Deval L. Patrick and other state officials, could be approved by regulators within six months.
Cerberus Capital Management is perhaps best known to the general public for its disastrous purchase of Chrysler LLC in 2007, which cost the firm billions when the automaker fell into bankruptcy in May 2009.
Cerberus was founded in 1990 by former Drexel Burnham Lambert Inc. bond trader Stephen Feinberg. The firm has created a new affiliate called Steward Healthcare System LLC for the deal.
Additional information is available at caritaschristi.org.
Profit has NO place in healthcare. This country will never be able to restrain escalating healthcare costs as long as some people consider it moral to make profits (and distribute them) by increasing costs while reducing the actual provision of health care services.
How are we to make sense of the Archdiocese’s sale of Caritas Christi to a for-profit company? Their stated interests in the human condition would seem to be at odds with $$$ — oh, sorry, I forgot for a moment that talk is cheap, and utterly meaningless most of the time.
Finally, where is the Landmark leadership that got this community hospital into this mess? Where are the Board members? What did they do to raise funds to stabilize the finances of Landmark while there was time? How did they fulfill their other fiduciary responsibilities? — Not very well, apparently.