Dive Brief:
- Steward Health Care continues to show signs of financial distress. The Dallas-based hospital operator plans to close a medical center in Texas in the next few weeks, after reducing services and shuttering a number of other facilities in the U.S., Steward confirmed to Healthcare Dive.
- The closure of the Medical Center of Southeast Texas’ Beaumont campus is due to severe underutilization of services, a spokesperson told Healthcare Dive on Friday, though they declined to clarify the center’s performance relative to other locations. Impacted Beaumont employees will be given an opportunity to apply for open roles at Steward’s neighboring Port Arthur facility should they be available, the spokesperson said.
- In December, Steward said it would shutter a 182-bed facility in Massachussetts amid financial troubles, including millions of dollars in unpaid rent and missed vendor payments, as well as a pending False Claims Act suit filed by the federal government.
Dive Insight:
Steward Health Care has captured national attention for its increasingly fraught financial status following a torrent of lawsuits over unpaid bills, mounting facility closures and outcry from politicians over how Steward’s actions could harm patients’ access to care.
The for-profit operator, which runs 33 hospitals in eight states, is private and has not publicly posted financial documents since 2020. However, signs suggest that the physician-owned care network is struggling to stay afloat.
In July, a tax and advisory firm called BDO USA reviewed Steward’s finances related to the system’s plan to build a new behavioral health facility in Massachusetts. Their report shows Steward’s revenues are trending down while expenses are ticking up.
In addition, Steward had shockingly little cash on hand — a metric that can indicate health systems’ relative ability to weather precarious operating climates.
The operator carried only 10.2 days of cash on hand in 2023. In comparison, most hospital systems carried at least 150 days of cash on hand in 2022, according to KFF.
Steward has engaged restructuring advisors to assess options for turning its operational performance around, the Wall Street Journal reported on Thursday.
Lawmakers in Texas have yet to respond to Steward’s closure of its Beaumont campus. But in Massachussetts, congressional leaders are demanding answers from the operator.
This week, the state’s congressional delegation sent a letter to Steward’s CEO requesting a full briefing about Steward’s financial position and information for how it would continue care for patients in the state.
