Ascension Health buys $100m in Caritas Christi bonds: Phase I of an acquisition?

A year or so ago, Ascension Health wanted nothing to do with Caritas Christi.  The national Catholic health care system considered buying the Boston-based Catholic health system after it put itself on the block, but backed away given the toxic condition of Caritas Christi's books at the time.  After getting its house in order somewhat, Caritas Christi is looking for some capital to continue doing what needs to be done, and Ascension Health has agreed to pony up in a $100m, below-market-rate bond deal.  (See more HealthBlawg posts on Caritas Christi). 

Question of the moment for Caritas Christi CEO Ralph de la Torre:  What's the end game here? 

Ascension Health, like most for-profit or not-for-profit systems, must allocate its capital where it can best serve the mission of the organization.  In light of its mission, Roy Poses at Health Care Renewal recently looked askance at Ascension Health's decision to close a hospital in Detroit's inner city while building one in the tony suburbs.

Is Ascension Health interested in acquiring Caritas Christi now that some historical financial and other irregularities are behind it, and some state-attorney-general-endorsed restructuring has been accomplished?  Or is this just an investment?  Ascension Health says it "has a commitment to strenghthening Catholic healthcare."  De la Torre says it's just an investment and the funds will be put to good use across the system.  But one has to wonder whether Ascension Health will be back to kick the tires again and consider adding Caritas Christi — a small, local Catholic health system — to its portfolio and, if it does, whether Caritas' financially troubled Carney Hospital (for example) will be able to carry on in its present form.            

David Harlow
The Harlow Group LLC
Health Care Law and Consulting