September 21, 2010

Attorney General Martha Coakley

Office of the Attorney General
100 Cambridge Street
Boston, MA 02114-2509

RE: Caritas Christi/Cerberus Proposed Transaction

Dear Attorney General Coakley:

We are writing to express our serious concerns with the rapidly moving process
for government approval regarding the proposed purchase of the non-profit
Caritas Christi Health Care System (Caritas) by Steward Healthcare System LLC
(Steward), a subsidiary of the Wall Street private equity firm Cerberus Capital
Management (Cerberus). While we understand the desire of the proponents to
move this sale forward quickly, we urge you to conduct this review in a
deliberate, transparent, and inclusive manner.

As you are aware, this proposed conversion is unprecedented in the

Commonwealth. This complex transaction involves the state’s second largest
hospital chain and tenth leading employer. The sale could impact access to vital
services in many communities and has far-reaching implications for the future of
the state’s healthcare system. News reports detail Cerberus’ interest in
purchasing as many as six additional hospitals to add to their network.

Given the stakes for the Commonwealth and its citizens, we are concerned about
the rush to approve such a complicated transaction. Community-based groups
have articulated a set of issues and concerns that they would like addressed to
protect and enhance the health care services that these community hospitals
provide. Other transactions involving the sale and conversion of single non-profit
to for-profit hospitals, both in Massachusetts and in other states, have been
evaluated and approved on a much more extended timeframe.

We urge you to make sure this approval process provides all stakeholders with
the time and opportunity to have a dialogue with the proponents of the deal and
government officials about the deal’s impacts.

We also ask you to make public for review the information, data, and analysis
that your office and hired consultants have compiled over the past three months;
to require Steward to provide a detailed business plan and how it will spend its
proposed $400+ million of capital investment for public comment and analysis;
and, to provide the public a forum to provide feedback with this new information.
The six community hearings held in rapid fire succession in June and July of this
year provided limited opportunities for true engagement between the community
and the proponents. These hearings were held even though Steward still has not
submitted 60 of 64 appendices referenced in its Transaction Summary and Asset
Purchase Agreement and the findings from the independent review undertaken
by the AG remain unavailable to the public.

It should be acknowledged that Steward/Cerberus’ ownership of the Caritas

network brings with it many risks. As a private equity fund, Cerberus’ bottom line
obligation is to its investors, not to the Commonwealth, or to the patients in the
communities served by the Caritas system. Cerberus, like many other private
equity funds, has a track record of saddling acquisitions with debt while
extracting significant returns for itself and investors. Cerberus’ history is marked
by abandonment of poorly performing companies without regard for community
impact. In this case, Cerberus is entering an industry where it has no experience,
and is placing itself in a fragile situation where the consequences of failure and
abandonment could be life threatening. Cerberus’ need to produce investment
returns raises real concerns about the potential for its financial success to come
at a great cost to Massachusetts’ healthcare system.

The proposed sale would remove the Caritas hospitals from public ownership,
potentially impacting access to essential health services for our state’s poorest
residents while having far reaching implications for the future of Massachusetts’
healthcare system. We urge the Attorney General to make available to the public
the Cerberus financial and business plan, the remaining appendices, and the
information that your office has gathered over the past three months. Patients,
community organizations, and Massachusetts taxpayers have the right not just to
be heard quickly, but to have the time and access to materials to fully engage in
the public comment process.

We look forward to speaking with you. Please contact Matt Wilson at Health Care
For All at 617-275-2940 or mwilson@hcfama.org.

Sincerely,

Amy Whitcomb Slemmer, Executive Director

Health Care For All

Health Access Coalition

Lawrence General Hospital
Signature Healthcare Brockton Hospital
Southcoast Hospital Group

Matt Selig, Executive Director

Health Law Advocates
Dan Driscoll, Chief Executive Officer
Harbor Health Services

Rob Restuccia, Executive Director

Community Catalyst

Representative David Torrisi

Representative Steven D’Amico

Senator Susan Tucker

Senator Patricia Jehlen

Allan Rodgers, Executive Director

The Massachusetts Law Reform Institute

Al Norman, Executive Director

Mass Home Care Association

Laurie Martinelli, Executive Director

NAMI Mass

Sheldon H. Barr, President and Chief Executive Officer

Health Imperatives

Sheila Casey, Executive Director

Neighborhood Legal Services, Lynn/Lawrence

Carol Trust, Executive Director

National Association of Social Workers (NASW-MA Chapter)

Juliana Langille, Executive Director

Community Connections of Brockton

Lucinda Williams
Dorchester House Governing Board

Elizabeth Saville, President

Brockton Interfaith Community

Glen Ohlund, Director

Self Help Community Development Corporation

Greater Brockton CHNA Steering Committee

Karen Hall, Director

Stoughton Youth Commission
Cc: David Spackman, Division Chief Non-Profits/Public Charities Division