After months of uncertainty about its future, the nation's largest personal for-profit hospital chain has filed for chapter in Texas.
Dallas-based Steward Well being Care filed for Chapter 11 chapter on Monday, saying it would take steps to restructure its debt below court docket supervision and can proceed to handle its hospitals throughout america, together with eight in Massachusetts, whereas does.
Steward will negotiate the phrases of its debtor-in-possession standing with its proprietor, Medical Properties Belief, “for preliminary financing of $75 million and as much as an extra $225 million,” the corporate mentioned in a press release asserting the choice.
“Steward's hospitals, medical facilities and medical places of work are open and proceed to serve sufferers and the neighborhood at giant, and our dedication to our workers won’t change,” the corporate added in its assertion.
Steward operates greater than 30 hospitals in a handful of states and employs tens of 1000’s of staff, together with 16,000 in Massachusetts, in response to its unions. In his chapter submitting, Steward estimated that his collectors quantity greater than $100,000 and his liabilities vary between $1 billion and $10 billion. The corporate estimated its belongings in the identical vary.
Steward, in his assertion, blamed authorities reimbursement charges, rising labor prices and inflation for his monetary difficulties, in addition to the lingering impacts of the COVID-19 pandemic.
“Steward Well being Care has achieved all the pieces in its energy to function efficiently in a extremely difficult healthcare atmosphere,” mentioned Steward CEO Ralph de la Torre.
State officers have been monitoring care on the Steward services, that are positioned primarily in jap Massachusetts. In a press release Monday, state Well being and Human Companies Secretary Kate Walsh mentioned the state has been making ready for Steward's chapter submitting and that “sufferers shouldn’t hesitate to hunt care.”
“The Healey-Driscoll administration is working with Steward and any potential companions to assist an orderly switch of possession that protects entry to care, preserves jobs, and stabilizes our well being care system,” Walsh wrote.
Within the wake of the information, a number of state officers, together with Gov. Maura Healey and Lawyer Basic Andrea Campbell, scheduled a information convention for Monday at 9:45 a.m. to debate what Steward's chapter submitting means for the outlook. well being care system and what the state is doing to protect entry to providers for sufferers.
Some staff at Steward hospitals within the state beforehand described difficult circumstances as the corporate's funds have grow to be strained, together with unpaid payments and lack of provides. Dr. Vartan Yeghiazarians, president of the medical employees at Holy Household Hospital, mentioned final December that the issues had been inflicting some medical procedures to be delayed or canceled.
“I believe that's once we began to note that issues had been actually dangerous,” Yeghiazarians instructed WBUR's Deborah Becker.
State officers mentioned final Friday that that they had established a command heart to assist handle the results of any potential lack of providers, hospital closures, possession transfers or chapter. Their objective, they’ve mentioned, is to take care of the soundness of the state's well being care system.
The revelation of Steward's monetary issues in January sparked criticism of the position of for-profit corporations in well being care and requires higher oversight. Massachusetts lawmakers lately proposed laws that may extra carefully regulate the state's hospitals.
The chapter proceedings might reveal new particulars about Steward's monetary difficulties and the way the scenario grew to become untenable. The corporate has lengthy stored its monetary information secret, even defying a Massachusetts rule requiring hospital corporations to reveal detailed monetary data.
In February, state officers demanded extra documentation however mentioned the corporate didn’t totally meet its deadline.
Though Steward has mentioned it’s in search of a purchaser for its Massachusetts hospitals, no deal has emerged up to now.
State officers have indicated that one impediment to discovering new operators for Steward's hospitals is its leasing settlement with Medical Properties Belief. In 2016, Steward bought the Massachusetts hospital buildings and actual property to MPT. Proceeds from the sale helped Steward executives launch a nationwide enlargement, however burdened its hospitals with hire.
Steward has additionally been working to promote its doctor community, Stewardship Well being. In March, Steward introduced that he had reached a take care of Optum, whose father or mother firm, UnitedHealth Group, owns the most important insurer United Healthcare. The state Well being Coverage Fee will evaluation the settlement, however mentioned the businesses nonetheless should submit full paperwork. Steward indicated that the timing of this course of influenced his resolution to file for chapter.
“With the delay in closing the Stewardship Well being transaction, Steward was compelled to hunt various strategies to unite its operations,” de la Torre wrote in Monday's assertion. “With the extra funding on this course of, we’re assured that we’ll hold hospitals open, stocked and operational in order that look after our sufferers and workers is maintained.”
Massachusetts Affiliation of Well being Plans President and CEO Lora Pellegrini mentioned in a press release Monday that her group, which represents 14 well being plans, will proceed to offer protection on the Steward services.
“The Massachusetts Affiliation of Well being Plans and our member plans perceive the uncertainty created by Steward Well being Care's motion right now to file for Chapter 11 chapter,” he wrote. “Nevertheless, this submitting doesn’t imply that the system's hospitals, medical facilities or doctor teams will shut; sufferers can proceed to obtain care in any respect Steward services.”
The Massachusetts Nurses Affiliation praised Steward staff for caring for sufferers via a “grueling” course of. In a press release, the union urged well being care business leaders and state officers to “instantly take all obligatory steps to make sure the preservation of those services and the protected transition to extra steady nonprofit possession.” and accountable”.
“Inaction would worsen well being inequities, create hospital deserts, and weaken the complete healthcare infrastructure for all sufferers in Massachusetts,” the union mentioned.
This can be a growing story and shall be up to date.