With the announcement of healthcare reform, it might appear that the private equity firm sees potential here with the promise of new patients coming in the doors soon at Caritas Health Care. Even though purchased by Cerberus and being non profit status, the six hospitals will retain their Catholic affiliation. The hospital chain has had to recover from bankruptcy recently and has been on the path of rebuilding.
Some of the other relief efforts have included selling the lab business to Quest Diagnostics.
From the Website:
“Cerberus Capital Management, L.P., along with its affiliates, is one of the world's leading private investment firms. Through its team of investment and operations professionals, Cerberus specializes in providing both financial resources and operational expertise to help transform undervalued companies into industry leaders for long-term success and value creation. Cerberus holds controlling or significant minority interests in companies around the world.
Cerberus is headquartered in New York City with affiliate and/or advisory offices in the United States, Europe, the Middle East and Asia.”
In essence a non profit is no longer a non profit hospital system and the drive to make money by investing in healthcare is still alive and well with investors still calling the shots. Cerberus invests in turning companies around but had one failure called Chrysler in recent years. Once more we have a focus on profits taking the ring side seat. BD
Cerberus will provide approximately $830 million of capital support, including the assumption of all pension obligations for Caritas employees, the repayment of the system’s debt, a significant capital investment to fund operations and a commitment to approximately $400 million of capital projects, including six major construction projects that will provide immediate upgrades to each of the Caritas Christi hospitals, Caritas said.
“Cerberus is pleased to be making a long-term investment that will help ensure the viability and future success of the Caritas Christi health care system,” said W. Brett Ingersoll, co-director of private equity at Cerberus in a statement. “Caritas is the region’s largest community hospital network, and our investment will give physicians, nurses and other health professionals the additional tools they need to deliver world-class care to patients in the communities where they live.”
The agreement also stipulates that the six Caritas Christi hospitals will retain their Catholic identities, and their existing policies on charitable and pastoral care, community benefits, and approach to labor relations from a social justice perspective. The hospitals include St. Elizabeth’s Medical Center in Brighton, Carney Hospital in Dorchester, Norwood Hospital, Good Samaritan Medical Center in Brockton, St. Anne’s Hospital in Fall River and Holy Family Hospital in Methuen.