Biggest hospital bankruptcy in decades affects 2.2 million patients across eight states

Steward Health Care has put all 31 hospitals up for sale after filing for bankruptcy on Monday.

The largest private hospital chain in the US hopes to complete all transactions by the end of the summer to address a $9 billion debt burden, its lawyers said Tuesday during a court hearing in Texas.

Steward, which runs hospitals in eight states, hopes to keep all hospitals open in the long run, attorney Ray Schrock said.

“Our goal remains that no hospitals are closed under our watch,” he said. ‘We realize that there will be a change of ownership in many hospitals. But we don’t want these communities to go unserved.”

Steward filed for bankruptcy in Houston, Texas, on Monday after months of financial instability.

In court documents filed ahead of the hearing, Steward said it has a total of more than $9 billion in debt, including $1.2 billion in loans, $6.6 billion in long-term lease obligations, nearly $1 billion in unpaid bills from medical providers and suppliers, and $290 million in debt. unpaid wages and benefits of employees.

The for-profit chain — which operates 31 hospitals in eight states and cares for 2.2 million patients a year — had annual revenues of $6 billion before the bankruptcy.

Shrock said it is pursuing a sale of its physician group, Stewardship Health Care, for an amount that would repay the company’s loans and allow it to pay some of its suppliers.

Steward had hoped to use the proceeds from that sale to avoid bankruptcy. But stalled regulatory approvals forced the company to seek short-term emergency financing, leaving Steward without enough money to continue operations for long, he added.

At Tuesday’s hearing, the company was able to borrow $75 million from its landlord Medical Properties Trust.

It also hopes to borrow another $225 million from the landlord later during the bankruptcy.

After filing for bankruptcy on Monday, Steward bosses said they would continue daily operations at its hospitals, medical centers and doctors’ offices as normal during the bankruptcy.

After it closed a hospital in Massachusetts, officials in the state heavily criticized the company for its financial decisions.

They were particularly critical of a series of transactions that sold the company’s real estate and saddled the company with long-term lease costs for its hospitals.

Democratic Massachusetts Attorney General Andrea Joy Campbell said Steward’s bankruptcy should give government officials more insight into the company’s financial condition and whether it would jeopardize patient care in the pursuit of profits.

“If these efforts violated the law, those involved will absolutely hear from my office,” Campbell said at a news conference Monday.

In addition to Massachusetts, Steward also operates hospitals in Arizona, Arkansas, Florida, Louisiana, Ohio, Pennsylvania and Texas.

The chain has been struggling with its finances for months, failing to pay its bills and take out emergency loans. The Wall Street Journal reported.

One Steward hospital in Florida had a bat infestation in an intensive care unit, while other hospitals postponed surgeries because vendors weren’t getting paid.

Travel nurses have left their jobs at other Steward hospitals after their staffing agency said they had not been paid, the outlet reported.

“Steward Health Care has made every effort to operate successfully in a very challenging healthcare environment,” said Chief Executive Officer Dr. Ralph de la Torre in one rack.

“Filing for Chapter 11 restructuring is in the best interests of our patients, physicians, employees and communities at this time.”

Steward has been kept afloat so far by the relationship with his landlord Medical Properties Trust, which owns 10 percent of the company and has invested billions of dollars in the company’s real estate.

The company has filed for Chapter 11 bankruptcy protection in a bankruptcy court in Houston, Texas, with between $1 billion and $10 billion in debt.

In Massachusetts, where Steward accounts for about 7 percent of the state’s hospital capacity, regulators have drawn up contingency plans.

Kate Walsh, the state’s Secretary of Health and Human Services, said they are working to find new owners for Steward Hospitals to protect access to health care in Massachusetts.

“We will defend the interests of Massachusetts as vigorously and aggressively as possible during the bankruptcy proceedings,” Governor Maura Healey said.

‘Those interests are patients, jobs and the stability of the healthcare market.’

Officials in the state have a website to provide information and resources to patients, employees and community members as they navigate the bankruptcy filing.

Steward has said it is working with the state to ensure its hospitals and medical centers meet safety standards.

In the United States, Steward has nearly 30,000 employees, including 4,500 primary and specialty care physicians at 400 locations.

Several private equity-backed medical companies have filed for bankruptcy in recent years, including hospital staffing companies Envision Healthcare and American Physician Partners, and prison health company Tehum Care Services.