Dive Brief
- Members of Congress representing Massachusetts sent a letter to the CEO of Dallas-based Steward Health Care on Wednesday, demanding answers to how the health system’s increasingly dire financial affairs might impact care access in the state.
- Steward, which operates nine hospitals in the state, was recently hit with a False Claims Act lawsuit from the federal government. The operator also announced the closure of New England Sinai Hospital last month and has been accused of failing to make rental payments to a hospital landlord.
- Lawmakers, including Sen. Elizabeth Warren, D-Mass., warned that further closures could shift patient volumes to other hospitals that are already over capacity.
Dive Insight
Steward operates 33 community hospitals across nine states with a significant portion of its portfolio clustered in Massachusetts, according to its website. The for-profit health group employs more than 16,000 frontline caregivers in the state.
Steward’s financial problems have been escalating for over a year, according to a report from the Boston Globe. Sources told the Globe that the operator is in talks with state regulators about options, including seeking state funds, transferring ownership of some hospitals or additional closures.
Steward’s landlord, Medical Properties Trust, has called for repayments from the operator, accusing Steward of failing to pay its rent in full since September. At the close of 2023, the landlord said Steward owed Medical Properties Trust approximately $50 million in unpaid rent. A repayment plan may include the potential sale of hospital operations or divestitures, according to MPT.
In the letter sent Wednesday, lawmakers sounded the alarm on how potential closures could impede care in the region.
“The abrupt closure of Steward’s Massachusetts hospitals would significantly limit access to inpatient critical care and inpatient behavioral health care, as well as maternal and newborn health services in eastern Massachusetts,” the letter said.
In December, the operator blamed its high mix of Medicare and Medicaid patients alongside low-reimbursement rates for its flagging financials, and decision to reduce services in Massachusetts.
“Nearly 75% of Steward hospital patients are public pay which chronically underpay, sometimes at rates less than the cost of delivering services,” Steward Health said in a statement. “Unlike ‘non-profit’ systems, Steward does not have a multibillion-dollar investment portfolio to fall back on.”
Steward’s troubles come as other health systems around the country have shuttered facilities or pursued mergers and acquisitions in a bid for financial stability.
Financial distress drove 28% of hospital mergers and acquisitions last year, the highest percentage in recent history, according to consultancy Kaufman Hall.
