In 2010 and 2011, Steward — which is backed by private equity firm Cerberus Capital Management — acquired the struggling Caritas Christi Health System and other community hospitals in Massachusetts.
As a condition of converting the non-profit systems into for-profit entities, the attorney general’s office required Steward to submit data to ensure it would meet several commitments. For example, Steward had to offer employment to most members of the hospitals it overtook, spend a minimum amount in capital improvements, keep charity care at sufficient levels and maintain certain services at the acquired hospitals.
According to the report, Steward was compliant in all areas, and the attorney general’s office said it looks “forward to Steward’s continued cooperation as the AGO’s monitoring continues in future years.”
In FY 2011, Steward posted a total loss of $56.9 million, an operating loss of $14.6 million, a total margin of -4.3 percent, an operating margin of -1.1 percent and a cumulative total of 9.1 days cash on hand (though the report noted “it is common for investor-owned systems to minimize the amount of cash on their balance sheets”).
The report said Steward recorded such heavy losses mostly due to reorganization costs and acquisition-related expenses, which totaled $39.5 million.
The two Steward hospitals that posted the largest losses were St. Elizabeth’s Medical Center in Brighton and Quincy Medical Center in Quincy.
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