Judge OKs Car­i­tas sale

Nurses union agrees to new la­bor agree­ment

Modern Healthcare - - The Week In Healthcare - Joe Carl­son

One day be­fore Car­i­tas Christi Health Care re­ceived fi­nal reg­u­la­tory ap­proval for its sale to a pri­vate eq­uity firm, mem­bers of the union rep­re­sent­ing 1,700 nurses at the Ro­man Catholic sys­tem last week ac­cepted a new five-year la­bor agree­ment with raises and a new pen­sion guar­an­tee.

A spokesman for Bos­ton-based Car­i­tas Christi said pri­vate eq­uity group Cer­berus Cap­i­tal Man­age­ment, set to pay at least $830 mil­lion for the six-hos­pi­tal sys­tem, did not have in­put in ne­go­ti­at­ing the deal struck with the Mas­sachusetts Nurses As­so­ci­a­tion.

The new la­bor con­tract guar­an­tees reg­u­lar wage in­creases and the es­tab­lish­ment of a new de­fined-ben­e­fit, multi-em­ployer pen­sion plan, said to be a first-of-its-kind for Bay State nurses. The deal ap­plies at four Car­i­tas hos­pi­tals: Car­ney Hos­pi­tal in Dorch­ester, Good Sa­mar­i­tan Med­i­cal Cen­ter in Brock­ton, Nor­wood (Mass.) Hos­pi­tal and St. El­iz­a­beth’s Med­i­cal Cen­ter in Brighton.

Car­i­tas spokesman Chris Mur­phy said the con­tract will re­main in force along with any other ex­ist­ing la­bor agree­ments un­der the new own­er­ship.

“A five-year con­tract is pretty long, and it gives us a lot of sta­bil­ity. We know what our nurs­ing work­force ex­penses will be for the next five years,” Mur­phy said.

A spokesman for Cer­berus de­clined to com­ment on the la­bor deal, which gives 2% bonuses in 2011 and raises of 2% for 2012 and 2013 with an op­tion to re­open salary ne­go­ti­a­tions in 2014, along with en­rich­ing the union salary scale for each year of clin­i­cal ex­pe­ri­ence at their re­spec­tive fa­cil­i­ties.

One day af­ter the union vote, a judge pro­vided the fi­nal reg­u­la­tory clear­ance for the sale. Supreme Ju­di­cial Court Judge Francis Spina ruled Oct. 29 the pro­posed trans­ac­tion had met all due dili­gence re­quire­ments. Cer­berus in March agreed to spend at least $430 mil­lion to fund pre-ex­ist­ing worker pen­sions, re­tire sys­tem debt and pro­vide work­ing cap­i­tal, along with an ad­di­tional $400 mil­lion to fund cap­i­tal im­prove­ments in or­der to ac­quire the sys­tem from the arch­dio­cese.

A re­view of the deal by Mas­sachusetts At­tor­ney Gen­eral Martha Coak­ley added a pro­vi­sion un­der which Cer­berus agreed not to sell any of the hos­pi­tals for three years, and to en­gage in a lengthy pub­lic re­view process in or­der to close any of the hos­pi­tals, which could be done only af­ter two con­sec­u­tive years of op­er­at­ing losses.

Al­though the sys­tem is legally owned by an in­de­pen­dent not-for-profit or­ga­ni­za­tion, both the Arch­dio­cese of Bos­ton and the Vat­i­can had to sign off on the deal, which they have done, Mur­phy said.

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