Hospital operator Steward Health Care files for bankruptcy protection
BOSTON — Hospital operator Steward Health Care filed for bankruptcy protection early Monday morning, but vowed to keep the eight hospitals it operates in Massachusetts.
In a news release, company officials said Steward took this step as a necessary measure to enable the company to continue providing necessary care to its patients.
“Steward does not anticipate any disruptions to daily operations, which will continue as normal during the Chapter 11 process,” the company said in a written statement. “Steward hospitals, medical centers and physician practices are open and continuing to serve patients and the broader community, and our commitment to our employees will not change.”
The Dallas-based company operates more than 30 hospitals across the country. Steward’s eight hospitals in Massachusetts, including St. Elizabeth’s Hospital and Carney Hospital, both in Boston. It has filed for protection in the U.S. Bankruptcy Court for the Southern District of Texas.
Steward’s troubles in Massachusetts have drawn the ire of top political figures, including U.S. Sens. Elizabeth Warren and Edward Markey, who have said the company’s previous private equity owners “sold Steward for parts” and “walked away with hundreds of millions of dollars . ”
Steward said it is finalizing the terms of its landlord Medical Properties Trust’s “obligor-in-possession financing” for an initial financing of $75 million and “up to an additional $225 million if certain conditions are met.”
“Steward Health Care has made every effort to operate successfully in a very challenging healthcare environment. Filing for Chapter 11 restructuring at this time is in the best interests of our patients, physicians, employees and communities,” said Dr. Ralph de la Torre, CEO of Steward, in a press release.
“In recent months, we have secured bridge financing and progressed with the sale of our Stewardship Health business to help stabilize operations across our hospitals. The delay in completing the Stewardship Health transaction forced Steward to seek alternative methods to bridge its business,” he added.
He also pointed to what he described as inadequate reimbursement from government payers due to declining reimbursement rates at a time of skyrocketing costs.
Torre said that by seeking bankruptcy protection, Steward will be better positioned to “responsibly transition ownership of its Massachusetts-based hospitals, keep all of its hospitals open to treat patients and provide continued care and service to our patients and our communities.”
In March, the company announced it had struck a deal to sell its nationwide physician network to Optum, a subsidiary of UnitedHealth Group, as it works to stabilize its finances.
The move came as Gov. Maura Healey said state monitors were monitoring Steward Health Care’s health care facilities in Massachusetts, including hospitals in some of the state’s poorer communities.
Massachusetts Democratic Senate President Karen Spilka said Monday that her “immediate concern remains the quality and continuity of care for the thousands of patients within the Steward system.”