April 19, 2012; Source: Boston Globe
The abrupt departure of Bill Walczak, CEO of Carney Hospital in Dorchester, Mass. for the past 14 months, has raised concerns about the facility’s future. Established in 1863 as the first Catholic hospital in New England, Carney Hospital moved to Dorchester in 1953 and since then has been an anchor in its community, though it has struggled financially since the 1950s, and downward pressure on reimbursement rates from Medicaid and Medicare has added to the financial stresses.
In 2010, Carney (along with five other Caritas Christi hospitals) was sold to a private equity firm with the approval of Massachusetts Attorney General Martha Coakley. Steward Health Care is a holding company formed by that private equity firm, Cerberus Capital Management, for the purchase of Massachusetts hospital facilities. As a private equity firm, Cerberus’ mission is to amass as much capital as possible. In converting the nonprofit Caritas hospitals into for-profits, Steward promised not to close any of them for three years (with an additional two years later included)—unless there were consistent losses. Since then, Steward has gone on to acquire several other Massachusetts hospitals.
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Walczak’s hiring by Steward was a surprise. Walczak is a long-time community activist and founder of Codman Square Health Center, a nonprofit provider of healthcare services and education in Dorchester. In 2008, he led a campaign against the proposed closing of Carney Hospital. His successes in local organizing and as the founder and CEO of Codman Square were based in servicing the specific needs of the very diverse Dorchester community.
Walczak’s hospital associates report that the CEO was in the process of presenting a strategic plan for Carney Hospital, including new services for this chronically underserved area. Steward’s spokesperson rejected the concept of such a plan, stating that individual hospitals were not to create their own plans: “The strategic plan for the entire Steward system is an integrated model,’’ he said. “You don’t look at each hospital in isolation.’’
This will be an interesting situation to watch. Walczak is an unusually well respected and savvy community leader in the Boston area. –Terry Masters