Sunday, November 14, 2010

Caritas Christi Goes PEU

Hellhound Cerberus Capital Management closed its purchase of Caritas Christi Health System, once the largest nonprofit community hospital system in New England.  Cerberus "purchased" Caritas solely with a promise to provide capital.  Prior nonprofit sellouts funded community foundations, but not the Caritas deal.

Who believes in for-profit hospitals, owned by private equity underwriters (PEU's)?

Massachusetts Supreme Judicial Court, 
Massachusetts Attorney General
Department of Public Health
Roman Catholic Archdiocese of Boston
The Vatican
Recall Caritas couldn't invest in insurer CeltiCare, as it conflicted with their Catholic mission.  Yet, a PEU sellout to Cerberus Capital Management was a perfect fit?  It's fitting that Cerberus was a three headed hound, guarding the gates of hell.

Also optioned in the deal?  Caritas Christi's Catholic identity, which can be bought out for a mere $25 million.  PPACA builds on the Massachusetts experiment.  Caritas couldn't survive, even after three years of "reform."  The management team that couldn't make a profitable go alone, will stay on under Cerberus.

We look forward to working with Caritas’ outstanding management team to build a community-based health care model that will thrive for many years to come.

White House Health Czar Nancy-Ann Deparle set the table for stressed nonprofit hospital/PEU deals.  She has experience in this area.  To see how a PEU milks for-profit hospitals, examine KKR's bleeding of HCA, a mere $4.25 billion in 2010.  PEU greed infects health care.  Shadow bankers will do for healthcare what they did for America's financial system, bring it to its knees.  How sad that religion and government have been co-opted.

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