Steward Health Care says it plans to sell off all its hospitals after announcing this week that it filed for bankruptcy protection
Steward Health Care said it plans to sell off all its hospitals after announcing this week that it filed for bankruptcy protection.
The Dallas-based company, which operates more than 30 hospitals nationwide, said it does not expect any interruptions in its hospitals’ day-to-day operations, which the company said will continue in the ordinary course throughout the Chapter 11 process.
In court filings, the company said that beginning in late January, Steward initiated what it described as a “phased marketing process” for the sale of its hospital facilities.
“Presently, the company is marketing all of its hospitals,” the company said a filing Tuesday.
Steward filed for bankruptcy protection early Monday. In a news release, company officials said Steward took the step to let it continue to provide needed care to patients.
“Steward’s hospitals, medical centers and physician’s offices are open and continuing to serve patients and the broader community and our commitment to our employees will not change,” the company said in a written statement.
Steward’s eight hospitals in Massachusetts include St. Elizabeth’s Hospital and Carney Hospital, both in Boston. It filed for protection in the U.S. Bankruptcy Court for the Southern District of Texas.
Massachusetts Attorney General Andrea Campbell said Wednesday that she is pushing for the creation of a Patient Care Ombudsman to advocate for patients and employees throughout the bankruptcy process. She also said she has the authority to review any proposed sale under her office’s antitrust powers.
“The office has authority to review any proposed sale, and we would do so in order to best protect access to a competitive and affordable healthcare marketplace,” she said in a written statement. “If we find violations of the law, we will address them.”
Steward’s troubles in Massachusetts have drawn the ire of 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.”
Massachusetts Gov. Maura Healey said Monday that the state had been preparing for a possible bankruptcy filing. Despite the filing, she said, Steward hospitals will remain open and patients should keep their appointments.
“This situation stems from and is rooted in greed, mismanagement and lack of transparency on the part of Steward leadership in Dallas, Texas,” Healey said Monday. “It’s a situation that should never have happened and we’ll be working together to take steps to make sure this never happens again.”
Steward said it is finalizing the terms of “debtor-in-possession financing” from its landlord Medical Properties Trust for initial funding of $75 million and “up to an additional $225 million upon the satisfaction of certain conditions.”
“Steward Health Care has done everything in its power to operate successfully in a highly challenging health care environment,” Dr. Ralph de la Torre, CEO of Steward said in a news release.
He pointed in part to what he described as insufficient reimbursement by government payers as a result of decreasing rates at a time of skyrocketing costs.
Torre said that by seeking bankruptcy protections, Steward will be better positioned to “responsibly transition ownership of its Massachusetts-based hospitals.”
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.
Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
