The following is a Catholic Action League of Massachusetts special report…
In the last two weeks of August, both Brian Fraga of the National Catholic Reporter, and Chris Serres of The Boston Globe, reached out to the Catholic Action League of Massachusetts, seeking information on the League’s opposition, in 2010, to the sale of the Archdiocese of Boston’s Catholic hospital system, Caritas Christi Health Care — then the second largest healthcare system in New England — to the now collapsing Steward Health Care.
In response to their inquiries, I sent them the following report. With the closing of Carney Hospital on August 31st, and with a federal bankruptcy court approving the sale of the four remaining hospitals yesterday, I thought it would be timely to now release that report to our members.
The Current Crisis
The bankruptcy and collapse of Steward Health Care — the consequence of greed, mismanagement and apparent self-dealing by the company’s leadership and profiteering by its former corporate parent — will result in the sale and secularization of four former Caritas Christi hospitals and the closure of the oldest Catholic medical institution in New England, Carney Hospital, which has served the Catholics of Boston since 1863.
When the Archdiocese of Boston sold Caritas Christi Health Care to Steward in 2010, one of the conditions of the sale was that Steward would continue to operate the hospitals in accordance with the Ethical and Religious Directives for Catholic Health Care Services, promulgated by the U. S. Conference of Catholic Bishops.
While there has been extensive media coverage of the Steward catastrophe, there has been no mention in the news media of the fact that the sale of the Steward hospitals means the end of Catholic health care in eastern Massachusetts.
None of the public players in the current crisis — Massachusetts Governor Maura Healey, Boston Mayor Michelle Wu, the Steward management, the potential buyers or voices in the media — have even hinted that the Ethical and Religious Directives might continue when the hospitals are sold.
This final secularization will be an irreparable loss for the Catholic community in Greater Boston, depriving faithful Catholics of the comfort and security of knowing that their health care institutions are infused with Christian values and are informed by a Catholic ethos which respects the sanctity and inviolability of human life.
Strangely, the Archdiocese of Boston has issued no public comment on this disaster, nor has it made any attempt — to our knowledge — to salvage what remains of Catholic health care from the Steward dissolution.
Perhaps conscious of its own responsibility in this debacle, the Church has kept a prudent silence while this crisis has unfolded. It is understandable that the archdiocese would not want to embarrass Cardinal O’Malley, who is retiring, by raising issues which might attribute this cascade of failure to improvident decisions made by him fourteen to sixteen years ago.
The Approval of the Caritas Sale
The sale of Caritas Christi in 2010 required the approval of the Caritas Christi Board of Governors, the Archdiocese of Boston (the Roman Catholic Archbishop of Boston, Inc., a Corporation Sole) and the Holy See.
In state government, it required the approval of the Massachusetts Public Health Council, which was the authority tasked with issuing licenses to the new owners of the hospitals. The Public Health Council is a constituent agency of the Massachusetts Department of Public Health. Its members, in 2010, were appointed by then Governor Deval Patrick.
It also required the final approval of the Supreme Judicial Court of the Commonwealth, which acted on the recommendation of the Attorney General, Martha Coakley, in her capacity as the Constitutional Officer responsible for the regulation of Public Charities in Massachusetts.
Coakley, however, was not a disinterested party in this matter. She was the recipient, in November of 2009, of a substantial campaign contribution from then Caritas CEO Ralph de la Torre. Her decision to recommend SJC approval of the sale would enrich her campaign donor. Coakley announced her support for Steward’s acquisition on October 6, 2010.
The Catholic Action League
The Catholic Action League of Massachusetts opposed the sale of Caritas Christi to Steward Health Care in 2010.
I testified, in opposition to the sale, at three public hearings in the summer and fall of 2010.
The first hearing, at Brighton High School on June 22nd, was before Attorney General Coakley and representatives of the Department of Public Health. On that occasion, I pointed out that the sale “…means that the future of nearly a century and a half of Catholic health care in Greater Boston will be in the discretionary authority of a secular, non-Catholic, for-profit, out of state, capitalist corporation.”
The second hearing, on July 1st at the Carney Hospital in Dorchester, was also before the Attorney General and officials of the DPH. The third hearing, on October 13th at Suffolk Law School in Boston, was before the Public Health Council, which, apparently unconcerned with optics, approved the sale, immediately, upon the conclusion of the hearing.
The League also issued nine news releases and one action alert on the sale, sent two letters to the editor of The Boston Globe, and participated in perhaps two dozen media interviews on the subject.
Concerns About the Catholic Identity of the Hospitals
Our first concern with the sale was that the Catholic identity of the then six hospitals might be either abandoned or compromised by Steward.
This would deprive the Catholic community of authentically Catholic health care institutions where Catholic medical ethics were practiced, where the sanctity of human life was protected from conception to natural death, where there were adequate provisions for the pastoral care of patients, and where the conscience rights of Catholic doctors, nurses and healthcare workers were respected and preserved.
The details of the transaction raised serious questions about the long term viability of the system’s Catholic identity.
First of all, there was only a three year so-called ‘protected period’ when the hospitals could not be sold or closed. There was also a concurrent three year so-called ‘maintenance period’ when major cuts to services and staff could not be implemented.
Finally, there was a termination clause which allowed Steward, for a 3% buyout, to end the system’s Catholic character if it found that character to be ‘materially burdensome,’ as determined by the sole discretion of Steward.
Cardinal O’Malley repeatedly claimed that the Catholic identity of the hospitals would be protected. He was contradicted however, by the Chairman of the Caritas Board of Governors, James Karam, who testified at the July, 2010 Carney hearing that he told Cardinal O’Malley that he could not guarantee the future Catholic identity of Caritas, but could guarantee that the hospitals would be closed without the sale.
Frankly, the Catholic identity of the former Caritas hospitals lasted, at least formally, longer than we expected.
It did so however, in a somewhat attenuated form. No one has ever made the assertion that the Ethical and Religious Directives have been rigorously enforced under Steward. Much of the Catholic iconography of Saint Elizabeth’s Hospital has disappeared since 2010, and Carney Hospital has been seen flying the Rainbow flag during ‘Pride Month’ in June.
Concerns About Catholic Health Care Administered by a For-Profit Entity
Our second major concern was the seeming contradictions inherent in a for-profit entity administering Catholic health care. As I pointed out at the June, 2010 Brighton hearing, this could adversely affect both the community orientation of the hospitals, and affordable access and charitable care for the indigent, the uninsured and the under-insured.
It would also have implications in labor relations, as the Catholic social principle of the just wage, or the family wage, would be replaced by the free market law of supply and demand, in employee decisions.
We knew, obviously, that Attorney General Coakley was a determined and longstanding proponent of legal abortion. In a January 2010 interview on WBSM radio — when questioned about the conscience rights of pro-life medical personnel — she responded, memorably and callously, ‘You can have religious freedom, but you probably shouldn’t work in the emergency room.’
We understood, lucidly, that Coakley would not therefore be responsive to our concerns about the pro-life Catholic identity of the hospital system.
We had some hope however, that she would listen to the voices of progressives on the political Left — including some of her own primary voters and supporters — who were raising the same social justice issues that the League was about the propriety of handing over a non-profit Catholic hospital system to the creation of a private equity firm.
Some pro-life Catholics, citing Coakley’s abortion advocacy, demanded that Coakley recuse herself from this process. We did not agree with that approach.
To paraphrase a remark about Ronald Reagan, we thought we should let Coakley be Coakley, and perhaps, following her own progressive instincts, there was a chance that she would disapprove of the sale on social justice grounds.
Sadly, Martha Coakley ignored objections from both the Right and the Left.
While we saw the acquisition of Caritas Christi by Cerberus Capital Management — through its subsidiary, Steward — as deeply problematic and dangerous to the future of Catholic health care, we never could have imagined the systemic rape of the network that occurred under Steward’s malfeasant leadership.
Who Was Responsible for Ralph de la Torre?
In March, 2008, Attorney General Coakley engineered what appeared to be a remarkable coup involving the Catholic Church in Massachusetts.
Exploiting fiscal and management issues then afflicting Caritas, Coakley used her Public Charities oversight powers to persuade/pressure/force the archdiocese out of the ownership, governance and daily operations of Caritas Christi, which became, effectively, an independent non-profit organization affiliated with, but no longer administered by, the Catholic Church.
This was, undoubtedly, the single largest alienation of ecclesiastical property in the history of the Church in Boston. There seemed to be however, at least publicly, very little resistance from the archdiocese against this act of dispossession.
Did the Archdiocese of Boston, in financial crisis after paying $151 million to settle sexual abuse cases, already view Caritas Christi as a liability that needed to be discarded? We cannot be sure.
Under the new governing arrangement, the Archbishop of Boston ceased to be the Chairman of the Board of Governors. The archdiocese was allotted three of sixteen seats on the board.
The archbishop retained reserve authority over Catholic identity, medical ethics, the aforementioned board appointments, and most importantly, over any transactions involving sale or transfer of property.
This transition occurred on May 22, 2008.
Ralph de la Torre — now the focus of congressional investigations, intense media scrutiny, and possible criminal probes over his role in the destruction of Steward Health Care — was named CEO of Caritas Christi on April 2, 2008, by the Caritas Christi board, then chaired by the appointee of Cardinal O’Malley, James Karam.
Karam, like de la Torre, would transition from Caritas to Steward. He would later become Chairman of the Steward insurance company, TRACO.
The Cardinal hailed de la Torre, saying “It is with great enthusiasm that I welcome Dr. de la Torre to Caritas Christi. His leadership, combined with the new governance system of Caritas Christi, begins a new chapter in the system’s history, one that will result in a stronger system that is well poised to continue our long and proud tradition of serving the needs of all patients.”
After twenty years, Cardinal O’Malley’s decision making process is not obscure. In matters pertaining to Catholic Charities and Caritas Christi, he sought the counsel of his Secretary for Health and Social Services, Monsignor J. Bryan Hehir.
For personnel appointments, the Cardinal relied, often, on the advice of the late Jack Connors.
Was it Msgr. Hehir, Jack Connors, James Karam or some combination of the three who recommended de la Torre?
The search committee, established by Cardinal O’Malley in 2006, to find a new President for Caritas Christi Health Care, included both Msgr. Hehir and Chairman Karam.
The question remains of why the archdiocese made the unprecedented decision to convey a Catholic hospital system to a capitalist corporation.
Was de la Torre — looking to the future — already nest feathering with Cerberus while CEO of Caritas? Reasonable people might reasonably draw that conclusion.
Were de la Torre and Karam the principal proponents of the sale, or were there other voices? What was Monsignor Bryan Hehir’s position on the transaction? Did Jack Connors play a role?
To sum up, in 2010, the Archdiocese of Boston transferred ownership of a hundred and fifty year old, local, non-profit, Catholic hospital system to a newly created, out-of-state, for-profit, secular corporation controlled by a hedge fund.
What, possibly, could go wrong?
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Brian Fraga’s story in the National Catholic Reporter was published on August 28th. The Boston Globe story will appear sometime in September.
