Caritas Coincidences: Part 2

Several readers pointed out that we missed a few things in our previous post, Caritas Coincidences, so today we bring you a few more “coincidences.”  Also be sure to read some of the new comments on Caritas Coincidences: Part 1, Job Seeker, and Cronyism IV.  (scroll up a bit to see new comments out of sequence) including one today on Job Seeker about the $1..1M paid in six-figure salaries to seven people in the Chancellor’s office.  (We have not verified this information, but it seems pretty credible). We were also pleased to see someone (“StillHave Hope”) comment on the merits of a formal whistleblower policy to protect employees and clergy who want to do the right thing for the good of the Church but fear retaliation. Now, back to Caritas and the web of interconnected relationships that the Archdiocese allows to flourish.

Last time, we recounted how Jack Connors, Jr. sits on a large number of committees in the Boston Archdiocese and wields a huge amount of influence, including over the future of Caritas, archdiocesean finances and more.  We mentioned his conflict of interest over pushing for the Caritas sale while being chair of Partners Healthcare, who would be a likely acquirer of selected Caritas hospitals when Cerberus wants to sell them.  We shared John Kaneb’s conflicts of interest as vice chair of the finance council, trustee of Partners, and having played a key role in hiring the Caritas CEO. And we covered how the CEO of Caritas gave money to the Attorney General days after the deal to sell Caritas was put in motion and has been sharing notes and collaborating with Partners already.  We also mentioned how Connors and family members gave $14,000 to Attorney General Martha Coakley’s senate campaign. Unfortunately, we still missed telling you a few things:

  1. Connors as Partners Chair coincidentally endorsed Coakley for U.S. Senator in a November 2009 press release just days after the Caritas deal with Cerberus was set in motion
  2. Coakley side-stepped incriminating Partners in her price-fixing investigation report, coincidentally two months after Connors’ endorsement
  3. Yet another Catholic crony of Jack Connors and Fr. Bryan Hehir may have played some role in the original price-fixing agreement with Partners, was on the Catholic Charities Board with Fr. Hehir, and coincidentally was given with a six-figure job at the Archdiocese’s PR firm in 2008
  4. Jack Connors had what some consider to be a prior conflict of interest with Partners, associated with him making $250M by selling a Harvard Medical School/Partners-affiliated company to Bain Capital without the Partners Board knowing of the conflict.

The key points here remain that the Attorney General has approval authority over the Caritas deal yet she and other players are closely linked to key Caritas and archdiocese players–and there also seem to be enough conflicts of interest in this interconnected spider-web and unanswered questions that the deal struggles to pass an objective sniff test.  This gets complicated, so we will cover it in four sections today.

1) Jack Connors publicly endorsed Coakley for U.S. Senator days after the Cerberus deal was set in motion

OK, so we missed telling you that beyond giving money to Martha Coakley’s campaign, Jack Connors, Chairman of Partners for the past 14 years, and “pope of Boston’s Catholic power brokers” by coincidence also gave a public endorsement for Attorney General Coakley last November during her Senate campaign (see “Coakley’s new partner.”   This endorsement was on November 19, coincidentally just a few days after Caritas CEO Ralph de la Torre returned from meeting with a senior person from Cerberus to put the sale of Caritas in motion.  Maybe the Connors endorsement for Coakley was in process previously, but the timing is interesting anyway.  Coincidentally, the Coakley press release identified Connors merely as former head of Hill Holliday, but didn’t mention him as being the present chair of Partners.

2) Coakley side-stepped incriminating Partners in her price-fixing investigation report two months after Connors’ endorsement

The Caritas conflicts of interests with Connors, de la Torre, Kaneb, and Partners documented previously are very significant on their own. But, they may actually pale in comparison to the conflict of interest over  Coakley announcing an endorsement by Connors at the same time her office was in the midst of investigating a price-fixing arrangement by Connors’ Partners Healthcare in conjunction with Blue Cross/Blue Shield and other insurance companies.  That investigation originated from a Boston Globe Spotlight series in December 2008.  When you have a few minutes, do read this article, published December 28, 2008, the third part in a fascinating Spotlight series.   Here are a few highlights about the handshake agreement between the CEOs of Partners (Dr. Samuel Their) and Blue Cross BlueShield (William C. Van Faasen):

Thier’s lawyers cautioned that a written agreement between the state’s biggest hospital company and its biggest health insurer that would make insurance more expensive statewide might raise legal questions about anticompetitive behavior, according to officials directly involved in the talks.

And so, in May 2000, the two simply shook hands on this: Van Faasen would give Partners doctors and hospitals the biggest insurance payment increase since Massachusetts General and Brigham and Women’s hospitals agreed to join forces in 1993. In return, Thier would protect Blue Cross from Van Faasen’s biggest fear: that Partners would allow other insurers to pay less…

As the state slashed oversight of healthcare, no private company was able and willing to moderate Partners’ ambitions. Blue Cross, which now controls 60 percent of the health insurance market, was best positioned to do so but flinched at the possibility of a public tangle. As former Blue Cross executive Peter Meade said at a meeting of company executives in 2000 at which some urged a tougher stand against Partners: “Excuse me, did anyone here save anyone’s life today? We are a successful business up against people that save people’s lives. It’s not a fair fight.”

One month later, on January 23, 2010, the spotlight report had sparked an investigation by the Attorney General. As reported in Partners, insurer under scrutiny: AG seeks details on agreement; Possible collusion over prices cited:

Attorney General Martha Coakley has launched an investigation into whether the state’s largest health insurance company and its largest healthcare provider may have illegally colluded to increase the price of health insurance statewide over the last nine years, according to several legal and government sources. Since 2000, Blue Cross has boosted the rate it pays for medical care by Partners doctors and hospitals by 75 percent, dramatically more than the increases given to most other Massachusetts hospitals. Blue Cross now pays $2 billion a year to Partners, parent company of Massachusetts General and Brigham and Women’s hospitals.

But 10 months later the Attorney General was deep into her U.S. Senate campaign, she collected campaign donations from  Caritas execs and Connors and an endorsement from Connors, and by coincidence there was not a word to be heard about the Partners price-fixing investigation.  Someone at Blue Mass Group commented:

“…how about Jack Connors, Chairman of the Board of Partners Healthcare endorsing her?  The AG has significant oversight authority over non-profits and health care non-profits in particular.  There is a serious conflict of interest there.  And whatever did happen to her investigations into the health care industry?   The silence has been deafening from the AG’s office on the price fixing by Partners and BC/BS…

Equally critical was the Columbia Journalism Review, who reported the following in early January 2010:

A year ago, the Boston Globe reported that the attorney general was probing whether Partners and Blue Cross “may have illegally colluded to increase the price of health insurance statewide over the last nine years.” The AG’s investigation was in response to an in-depth Globe report from late December 2008 that described a handshake agreement between Partners and Blue Cross which, the Globe said, resulted in Blue Cross raising “the rate it pays Partners by 75 percent since 2000.” Partners also pressured the state’s other big insurers to offer similarly large increases that were passed on to policyholders. “There’s still no public word. Why the delay?” Mihos asked.

It’s not clear whether or how often Coakley’s investigation has come up during the campaign, but it appears there is no resolution. In late November, the Globe reported that “no court action has been taken” in the Partners case, and it noted that Coakley had received an endorsement from Partners chairman Jack Connors Jr. A campaign spokesman told the paper that Connors’ support had no impact on her decisions as attorney general. We called Coakley’s campaign to ask about disposition of the investigation, but no one returned our call.

On  January 30, 2010, eleven days after she lost the election, Coakley’s office released a high-level report of her investigation into the price fixing. Even though the original Globe spotlight series focused on the price-fixing by Partners, Coakley’s report avoided naming any names. Here is what the Globe reported of Coakley’s investigation outcome:

The report did not identify insurers and providers by name, and Coakley declined to release the names of the highest-paid, saying she wanted to lay out systemwide problems, not blame individual organizations.

A 2008 Globe Spotlight Team series focused on the Boston market found that hospitals such as Massachusetts General Hospital and Brigham and Women’s Hospital typically are paid 15 percent to 60 percent more for essentially the same work as other hospitals, even though the quality is not superior.

Coakley’s statewide investigation found that the payment gap was wider than the Globe determined. The report shows that a small group of about 10 hospitals statewide command significantly higher payments than the other 55, ranging from 10 to 100 percent more than their competitors for similar work.

So, even though the original Globe report named Partners and only Partners specifically, by coincidence, Coakley’s office did not name names and only outlined high level problems. No charges were filed.  Some may question the appearance of “I watch your back, you watch my back” collaboration with the AG and Connors’ Partners Healthcare, and that is why more Catholics and non-Catholics alike are questioning the objectivity of the AG’s review of the Caritas deal.

Apparently the U.S. Department of Justice was not quite satisfied with the results of Coakley’s year-long investigation of Connors’ Partners Healthcare, because in April of this year, it was announced that the Justice Department was investigating Partners themselves.  In “US investigates Partners’ contracts: Health network examined for possible antitrust violations we learned the following:

The US Department of Justice has opened a civil investigation into possible anti-competitive behavior by Partners HealthCare System Inc., the region’s most powerful hospital and physician network.  In a letter sent to Partners and the state’s three largest health insurers on April 19, investigators from the Justice Department’s antitrust division demanded documents relating to Partners’ “contracting and other practices in health care markets in Eastern Massachusetts.’’

The letter, obtained by the Globe, said the probe sought to determine whether the practices violated the Sherman Antitrust Act, which bars companies from using their market power to limit trade or artificially raise prices. The parties were told to respond by May 19.

The 2008 Globe’s spotlight report showed that Partners, under Connors’ chairmanship, did not mind colluding in such a way that insurance rates were driven up.  If that collusion was considered ethically acceptable by Connors and Partners, then one might ask, is behind-the-scenes collusion for Partners to have first pick of Caritas hospitals sold off in the future a real possibility already?   And is it simply a coincidental connection between Jack Connors, Chair of Partners, giving money to the Attorney General and endorsing her while she was investigating price-fixing by Partners, and then Coakley’s investigation into price-fixing by Partners fails to identify Partners by name and talks only about broad systematic problems?  (Notice that the DoJ probe only names Partners and no other healthcare providers).  And has it been just a coincidence that Coakley and her office have failed to say anything critical of the Caritas deal after Connors and Caritas employees supported her campaign and began publicly pushing for the Caritas/Cerberus deal?  This blog has emailed Coakley’s office and her team working on the Caritas approval multiple times and gotten no response.  Not even a form-email acknowledgement of the input.  It is as though they are completely ignoring input.

iii) Yet another Catholic crony of Jack Connors and Bryan Hehir, Peter Meade, may have played a role in the original price-fixing agreement with Partners, was on the Catholic Charities Board with Fr. Hehir, and coincidentally, was given with a job at the Archdiocese’s PR firm in 2008.

We have not yet mentioned Peter Meade. OK, we do not have reason to believe he is involved in the Caritas situation, but since he is closely tied to the archdiocese and the key players, we thought you might find some of the coincidences with him noteworthy. Meade was executive VP for corporate affairs at Blue Cross Blue Shield from 1996 through February of 2008, and from the comment in the Globe article above, it sounds like he was supportive of the Blue Cross/Partners arrangement now subject to a Department of Justice price-fixing investigation. Along the way, he was Vice Chair of Catholic Charities (and Neal Finnegan was Chair) when they accepted money from Voice of the Faithful in 2003 against the wishes of then-apostolic administrator Bishop Richard Lennon, and Meade was later Chair of Catholic Charities when Fr. Bryan Hehir was President. Meade was brought back into the archdiocesan fold by Fr. Bryan Hehir when he was named on October 7, 2004 to co-chair the Meade-Eisner Reconfiguration Review Commission that reviewed and reversed a number of parish closing decisions.  Meade resigned as Chair from Catholic Charities in April of 2006 after the Vatican ruled that Catholic Charities could not broker adoptions to children of gay couples.  That same year, he and Jack Connors collaborated on the healthcare insurance law to cover uninsured Massachusetts residents:

After state legislators came tantalizingly close to approving a health insurance plan to cover uninsured residents – only to see the deal nearly die – Meade and Connors, the board chairman of Partners HealthCare, joined forces with a small group of business leaders in March. They devised a strategy in which businesses with 11 or more employees and no healthcare coverage would have to pay a $295 levy per full-time worker. Voila: law

In June of 2008, by coincidence, Meade was rewarded with a six-figure managing director job  at none other than Rasky Baerlein, the same PR firm as the Archdiocese, Catholic Charities, and Caritas Christi uses.   In August 2009, Meade left Rasky to take over as President and CEO of the Edward M. Kennedy Institute for the United States Senate being built at the JFK Library in Dorchester, where, according to the Boston Herald he is helping spend tens of millions in taxpayer dollars to honor the late Sen. Kennedy:

the amount of taxpayer money being funneled to a Dorchester shrine to the late Sen. Edward M. Kennedy has ballooned to $38 million and could rise to at least $68 million this year, infuriating watchdog groups who insist the project should be privately funded.

In another set of Coakley coincidences,  Meade gave Coakley a $250 campaign contribution and then moderated one of the fall 2009 debates.  And FEC records also coincidentally show that Larry Rasky, Chairman of Rasky Baerlein, had given Martha Coakley $2,000 during the campaign,

4. Jack Connors had what many consider to be a prior conflict of interest with Partners, associated with him making $250M by selling a Harvard Medical School/Partners-affiliated company to Bain Capital without the Partners Board knowing of the conflict.

Folks, we are running out of time today for this last one, so we will let you read it yourself.  Jack Connors is no stranger to  conflicts of interest. Here is the Globe’s article “Partners Leader Questioned on Outside Ties” about his conflict of interest as Chair of Partners when he made $250 million from the sale of one of his companies, M/C communications, to Bain Capital for $450 million in 2004.

The larger company, M/C Communications, grew to become the biggest commercial provider of continuing education to physicians in the decade between its inception in 1994 and when Connors sold it in 2004. It profited hugely from an exclusive commercial relationship it maintained with Harvard Medical School, whose faculty teach at seminars the company holds. Partners’ signature institutions, Massachusetts General Hospital and Brigham and Women’s Hospital, are major teaching affiliates of Harvard Medical School.

So there you have it folks.  Based on all of the agendas and conflicts of interest within the archdiocese, the oversight from the archdiocese over the Caritas sale is questionable.  And based on the conflicts of interest  and clear examples of situations where “I wash your hands, you wash mine” between Partners/Caritas officials and the Attorney General, the oversight by the state over the deal is also questionable.  No one has yet answered the ten questions we posed on our last post, which are questions this blog and other people have been asking all summer, if not since the original acquisition announcement was public.

To Cardinal O’Malley, Dr. de la Torre, Attorney General Coakley and MA Non-Profit Division Chief David Spackman: did you read our most recent email sent to you on August 12, and are you going to respond?  Is anyone from the Attorney General’s Office or from the Pastoral Center planning to say or do anything about this, or are you hoping the questioning of the deal will go away?

Hello?  Anyone there?

If this is your way of telling us to start writing to the Holy Father and Papal Nuncio, we get the message.

2 Responses to Caritas Coincidences: Part 2

  1. […] and involvement in the Archdiocese of Boston and related entities, some of which we discussed in Caritas Coincidences last […]

  2. […] way on pursuing local matters like the Partners Healthcare price-fixing case, which we described in this post as having been ceded to the U.S. Department of Justice?  BCI humbly suggests the Attorney General […]

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