Raising the stakes

The proposed acquisition of the Caritas Christi system by the Cerberus private equity firm continues to be in the local news. Today's lede:

Caritas Christi Health Care executives have told union negotiators they will shutter St. Elizabeth’s Medical Center in Brighton and Carney Hospital in Dorchester if they can’t close a deal for the six-hospital chain to be bought by a New York private equity firm.

And further down in the story:

Caritas representatives asked for concessions from the nurses union, including a wage freeze, but no agreement was reached, the two said. The executives also urged more nurses to take an early retirement program introduced last spring.

Compare this to what was reported in this story just one year ago:

With economic pressures on Massachusetts hospitals starting to ease, the strongest recovery may be taking place at an organization that was one of the weakest financially: Caritas Christi Health Care.

By aggressively cutting costs and boosting revenue from medical care, the Boston-based Catholic hospital chain is on track to post operating income of $31.1 million for the fiscal year ending Sept. 30, compared to a $20.4 million loss last year.

The anticipated swing of more than $50 million has been achieved through a series of moves, Caritas officials said. The chain consolidated operations at its six Eastern Massachusetts hospitals, cut jobs and froze salaries, negotiated higher reimbursement rates from insurers, and recruited more specialists to perform more complex - and profitable - procedures. A new urology group, for instance, has performed hundreds of prostate operations this year.

....Unlike some other hospitals, which have resisted union organizing efforts, Caritas signed an agreement with the Service Employees International Union to permit “free and fair’’ elections. Groups of employees at St. Elizabeth’s and Caritas Carney subsequently voted to join the union. Although the labor contracts are likely to boost expenses, de la Torre said he is sympathetic to workers who live in the same communities Caritas hospitals serve.

Higher labor costs as a result of unionizing will be offset by more than $30 million in annual cost savings, said chief financial officer Mark Rich, including by having groups of specialists treat patients at more than one hospital, and by merging physicians’ administrative functions. “There’s no one silver bullet,’’ Rich said.