Big news today in Boston. Rob Weisman at the Boston Globe reports that the Caritas Christi hospital system will be acquired by New York private equity firm Cerberus Capital Management in a $830 million deal. A formal state approval process is needed for the transaction to be consummated.
This would be the largest switch of hospital assets from non-profit to for-profit status that the state has seen. Where will the CEO show up on Jim Conway's chart below under the new arrangement? With the new financial resources being provided by Cerberus, Caritas has the potential to make investments in quality and safety that could help propel it to a leadership role in process improvement. That's the kind of competition that Massachusetts needs.
The article notes:
In such cases, the state Supreme Judicial Court reviews findings from the attorney general’s office, which considers such criteria as whether the transaction is in the public interest, whether the nonprofit has received “fair value’’ for its assets, and whether the nonprofit avoided conflict of interest during its decision-making. As part of a conversion to for-profit status, companies are generally required set aside money for the public’s benefit, such as by setting up a foundation.
A thought about this. If a foundation is set up, why not have its proceeds support quality and safety improvement training in medical schools and at hospitals generally in the state, perhaps stewarded by the Massachusetts-based Institute for Healthcare Improvement?
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