Cardinals claim rights in hospital
dispute
By PAMELA
SCHAEFFER NCR Staff St. Louis
In a rare public clash between members of the U.S. hierarchy and a
university president, three of the nations most powerful cardinals have
charged into a dispute in St. Louis over the proposed sale of a Catholic
hospital to a publicly traded for-profit company.
The outcome has potentially broad implications for U.S.
institutions with Catholic roots.
Cardinals James Hickey of Washington, Bernard Law of Boston and
John OConnor of New York have joined St. Louis Archbishop Justin F.
Rigali in condemning St. Louis Universitys board of trustees and its
president, Jesuit Fr. Lawrence Biondi, for a decision to sell St. Louis
University Hospital to Tenet Healthcare Corp.
Tenet, based in Santa Barbara, Calif., is the nations
second-largest for-profit health care system, after Columbia\HCA Healthcare
Corp.
Among questions the St. Louis issue has pushed to the surface is
what power a bishop has over an independent, largely lay board of a Catholic
institution that refuses his directives. Another question is who controls the
designation Catholic.
St. Louis University is one of hundreds of U.S. Catholic
institutions where ownership has been transferred from a religious order to an
independent board without going through a formal process of
alienation -- that is, permission from the Vatican to sell or
transfer church property. Is such an institution now subject to church law, as
Rigali has argued, or is it exempt, as Biondi contends?
In statements issued in recent days, prelates have leaned hard on
Biondi, warning of canonical improprieties and hinting strongly at possible
Vatican intervention in the dispute.
Hickey, Law, OConnor and Rigali all have close ties to
Vatican officials. Rigali worked in Rome for 25 years before being assigned to
the archdiocese of St. Louis in 1994.
Rigali, in a public statement on Oct. 17, said the 303-bed St.
Louis University Hospital will cease to be a Catholic hospital if
the proposed sale to Tenet goes through.
Hickeys statement reiterated an earlier warning from Rigali
that Vatican approval was required for such a major transfer of church
property. OConnor supported Rigalis argument that the hospital is
church property, regardless of its present legal status as a civil corporation
or its ownership by an independent board
Hickey wrote, It is my hope that this gravely flawed
decision will be overturned by the joint action of the Holy See and the
superior general of the Jesuits.
Law issued a similar statement a week earlier, citing a
fundamental difference between Catholic and for-profit health care
institutions. Law said the dispute raises the question of whether the board of
trustees has canonical authority for its decision. Perhaps the
intervention of the father general of the Society of Jesus and the Holy See can
reverse this lamentable action, he said.
Sources around the country say the situation in St. Louis is a
flash point for unresolved issues of Catholic identity and control that date to
the late 1960s and 1970s, when many religious orders transferred institutions
to independent boards.
Under civil law, Biondi is within legal rights to sell the
hospital, but members of the hierarchy are challenging his actions under canon
law. OConnor said the U.S. Supreme Court has ruled in support of the
churchs right to insist that canon law be followed in such matters.
Rigali warned in his statement that the goal of preserving
Catholic identity of institutions cannot be realized if we continually
yield institutions that are historically Catholic and have been perceived as
such by the community, to for-profit corporations. Others argue, however,
that members of the hierarchy cannot alone determine whether independently
owned institutions like St. Louis University and its hospital are entitled to
call themselves Catholic.
Despite the strong pressure, Biondi remained firm in his intention
to proceed with the sale, according to John Kerr, associate vice president for
university public relations. Were moving ahead in our letter of
commitment with Tenet Healthcare as we announced on Oct. 4, he said.
Im sure Fr. Biondi and Archbishop Rigali will continue to discuss
intricacies of the proposal so that the archbishop is fully advised of all the
issues hes concerned about.
Final terms of the sale are to be worked out over the next 60
days. Missouri Attorney Jay Nixon will review the proposed sale, as required in
transfers of not-for-profit institutions to for-profit.
The dispute came to a head on Oct. 4, when St. Louis
Universitys 52-member board of trustees voted to sell the hospital to
Tenet for about $300 million, ignoring Rigalis strong objections. Biondi
had assured the board and the public that terms of the agreement with Tenet
would allow the hospital to continue to carry out its Jesuit and Catholic
mission.
The board chose Tenets bid over a competing joint offer of
$200 million from two St. Louis-based Catholic health care systems.
In correspondence with Biondi, Rigali had expressed strong support
for accepting the lower offer from the Catholic groups over the one from Tenet.
The letters were given to university trustees on the day of the vote. Rigali
was not invited to address the board.
Rigali reacted swiftly and negatively after learning from Biondi
of the boards decision. In making the decision to sell the hospital
to a secular for-profit company, Fr. Biondi has acted without my support and,
to this point, without the approval of the Holy See, Rigali said Oct.
4.
Rigali has expressed concern that sale to a for-profit group would
compromise Catholic identity, care for the poor and ultimately have a negative
influence on Catholic health care nationally.
Rigali reiterated his adamant opposition after a 90-minute meeting
Oct. 10 with Biondi, archdiocesan and university officials.
Sr. Alice Gallin, former executive director of the Association of
Catholic Colleges and Universities, said the understanding has been that
educational institutions operated by religious orders were not church property.
The source of that understanding, she said, is a thesis put forth by Msgr. John
McGrath, a canon lawyer from The Catholic University of America, in the
mid-1960s. McGrath argued that such institutions are held in public trust and
are outside church law. Recently, however, that understanding is undergoing new
challenges from the hierarchy, Gallin said.
She has recently written a book tracing the history of the
conflict, Independence and the New Partnership in Catholic Higher
Education (University of Notre Dame Press, 1996).
In the late 1960s and early 1970s, the decade or so that followed
the Second Vatican Council, few Catholic leaders, including the pope, had
problems with such transfers, Gallin said. In more recent years, the thinking
of church officials has shifted, she said, and this question is being
raised again.
Although Rigali has avoided warnings about the Catholic identity
of St. Louis University as a whole, Law moved into that territory. The
action of the board of trustees jeopardizes the commitment of the university to
its Catholic identity, he said.
Previously, a number of U.S. Catholic universities or religious
orders have sold or merged holdings, including hospitals, schools and broadcast
operations, without asking permission or encountering interference from local
bishops or the Vatican. In other cases, however, bishops have intervened
successfully to prevent such transactions with for-profit groups.
The record is mixed, said Fred Caesar, director of public affairs
for Catholic Health Association. There is no cookie cutter formula. Every
situation is unique.
One recent transaction similar to the one proposed in St. Louis --
the sale of an Omaha, Nebr. hospital with ties to Creighton Universitys
medical school to a for-profit group -- went forward with the blessing of
Archbishop Daniel Sheehan, now retired, according to Dr. Richard OBrien,
Creightons vice president for health sciences.
Creightons teaching hospital was sold in 1984 to a
for-profit group and now is owned by Tenet. In the early 1990s, Creighton sued
American Medical International, owner of the hospital at that time, in an
effort to regain some control. As a result of the lawsuits, Creighton bought 26
percent of the hospital in 1994.
OBrien said Biondi had sought information about Tenet from
officials at Creighton and had received a positive report. OBrien said
the hospitals Catholic mission has flourished under Tenet,
the owner since 1995.
OBrien told NCR that the universitys health
education programs had expanded dramatically as a result of the hospitals
sale to a for-profit group. Its been a really good move for
us, he said.
Fr. Michael Gutgsell, chancellor of the Omaha archdiocese, had no
argument with that. The administration of Tenet understands and is
sensitive to the Catholic mission and moral teaching that the university is
committed to and that the tradition of the hospital comes out of, he
said.
Still, he said, more examples and more history would be needed to
know whether unions between Catholic and for-profit hospitals can work.
Bill Cox, president of the Catholic Health Association, said,
however, that under for-profit ownership, St. Joseph Hospital in Omaha has
increased prices and reduced care for the indigent.
The Catholic Health Association, based in St. Louis, represents
more than 1,200 Catholic-sponsored hospitals and nursing homes. The association
rejects publicly traded for-profit hospitals as members.
St. Joseph Sr. Jean deBlois, vice president for mission services
at Catholic Health Association, rejects the notion that Tenet could run a
hospital over the long term and retain Catholic identity.
It wont and it cant, she said, because of
the contradiction between Catholic values and the primary interest of
shareholders: to maximize profits. One of the fundamental values of our
tradition is that response to human need is a service, not a commodity to be
bought and sold, she said.
She warned that the sale of St. Louis University Hospital to Tenet
could mark the beginning of the end of health care under Catholic
sponsorship in the United States. Its a terribly ominous prospect
for Catholic health care, she said.
Biondi has stressed that, under terms of the sale, the Tenet-owned
hospital will be under contract to follow ethical and religious directives of
U.S. Catholic bishops for Catholic health care organizations. The directives
require a commitment to pastoral care and prohibit abortions, euthanasia,
sterilizations, in vitro fertilization and artificial insemination.
After the sale, the university would appoint five members of a
10-member hospital governing board, a key point for the universitys
trustees. Tenet would appoint the other five. Tenet has also promised to
continue the hospitals efforts to care for the poor.
The losing $200 million bid was offered jointly by two Catholic
health care corporations in St. Louis: SSM Healthcare, sponsored by the
Franciscan Sisters of Mary, and Unity Health system, a division of the Sisters
of Mercy Health System.
Biondi said the extra $100 million from the sale to Tenet would go
to programs and research at the universitys medical school.
St. Louis University is one of four U.S. Catholic universities
with medical schools. The others are Georgetown in Washington, Loyola in
Chicago and Creighton in Omaha. All four have also owned or been affiliated
with teaching hospitals.
A fifth Catholic medical school is New York Medical College in
Valhalla New York, which has strong ties to the New York archdiocese and
affiliations with 29 hospitals throughout the New York area.
National Catholic Reporter, October 24,
1997
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