An Interview with Bishop Thomas J. Tobin on the St. Joseph Health Services pension plan receivership

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Rhode Island Catholic Executive Editor Rick Snizek sat down Monday, Sept. 11 with Bishop Thomas J. Tobin to discuss the situation regarding the troubled St. Joseph Health Services of Rhode Island Inc. pension plan.

RS: What is your message for those who have been affected by St. Joseph Health Services of Rhode Island’s decision to place its pension fund into receivership?

BT: We are deeply concerned for the participants in the pension fund of St. Joseph Health Services who were very dedicated and faithful employees of St. Joseph’s for many years. We certainly hope and are praying truly that this comes to a very positive solution for them, as positive as will be possible. We feel very badly about the situation and hope and pray that it is resolved as well as possible in the end.

RS: What changed with respect to the diocese’s involvement in the SJHSRI Pension Plan following the 2009 merger with CharterCARE and again at the 2014 sale to Prospect Medical Holdings?

BT: It’s important for people to understand that since CharterCARE was formed and even more clearly in 2014 when all of this was purchased by Prospect, the diocese has not been involved in the management of those hospitals.

In fact, St. Joseph’s Health Services, in effect ceased to exist and has not been involved in the operation of those hospitals either. We, for six or seven years now, have been no more involved in the oversight of pension funds than we have been in the renovation of a lobby. So it’s a little bit frustrating, I think, and unfair for people to be asking what has the diocese been doing during this time. If you go into the lobby at Fatima Hospital, my picture is no longer there and neither is the pope’s. Until six years ago those pictures were there because we were more directly involved. But those pictures were taken out because from a managerial point of view, and an administrative point of view, the bishop in the diocese hasn’t been involved in that. It has become more secular and that’s just a tangible expression of that. The pictures are gone. The only role that we have maintained — and that’s by contract — is to ensure the Catholic identity and mission from a spiritual point of view at Our Lady of Fatima Hospital. Even though we sold the management and administration of that to CharterCARE and then to Prospect, our role solely was spiritual and pastoral to be sure that there was nothing there that was happening contrary to the Catholic faith in terms of religious and ethical directives and so forth.

RS: For a major transaction that was so thoroughly scrutinized, including at the state level by the Attorney General’s Office and the Department of Health, how could the pension plan have been left orphaned, without an owner following the merger and subsequent sale?

BT: When CharterCARE was formed, but more so when CharterCARE was purchased by Prospect, that was carefully reviewed and approved by everybody who was involved in the process, certainly by the state regulators, by the Attorney General’s Office, by the corporate boards who were involved at that point, even by the nurses’ union. The nurse’s union publicly supported this transaction. There are a lot of different parties pointing fingers now, but a lot of different parties were involved in this discussion and review and approval process. So I think the important thing for us not to form a circular firing squad here and start shooting at each other. The important thing now is try to figure out what happened and also to see if anything can be done to rescue the pension fund, even to some degree.

RS: Was it ever impressed upon you during the transaction process the fact that this pension plan was going to be orphaned?

BT: I don’t remember during my time on the board of St. Joseph Health Services, or since then, when these transactions took place — beginning six or seven years ago, and then three years ago — I don’t remember one serious conversation about the status of the pension fund. And certainly since the transaction took place with CharterCARE, I haven’t received one inquiry or piece of information about this since this all took place, which a bit frustrating, because now, everyone is placing blame.

RS: Who in your view has a “moral obligation” to help the pensioners?

BT: I think our moral obligation was fulfilled by the transactions — the establishment of CharterCARE and the sale to Prospect. I think the St. Joseph’s Health Board recognized a good number of years ago that this community hospital, as many community hospitals have realized, could no longer exist by itself. It was precisely because we couldn’t support this any longer as a freestanding hospital that we entered into these negotiations — for the purpose of saving it. Also, for the purpose of maintaining the administration, and the survival of the hospitals, including the pension funds. So I think when these transactions took place, everything I’ve read shows that the pension fund was funded at 92 percent, which is very good. Now I think if there’s any lacuna, that in effect through this process, the fund was orphaned. We were no longer involved, but the new owners didn’t assume ownership. The only entity that can improve the condition of the pension funds now is Prospect Medical Holdings. They’re a billion dollar for-profit corporation. I know when they’ve purchased other hospitals they’ve infused a lot of money into those pension funds to shore them up. And even though they abided by the original contract, I would hope they would look at that again and understand that a lot of these people we’re talking about now continue to be their employees and see if they can use some of their profits to improve the condition of the pension fund. I think they are the only ones who can do it now. When we speak about moral responsibility some of it has to land there.