Steward Health Care reports $592M loss amid major 2-year expansion push

Amid a major expansion push over the last two years, Dallas-based Steward Health Care reported operating losses totaling $592 million, according to The Boston Globe. 

The privately held health system posted an operating loss of about $270 million in 2018 and $322 million in 2017.

At the same time, the company's revenue jumped to $6.6 billion in 2018, up from $3.7 billion one year prior due to its acquisition of IASIS Healthcare, an 18-hospital system based in Franklin, Tenn. 

Steward spokesperson Darren Grubb told The Globe that the company is financially strong, pointing to the steep revenue jump. He said that the operating losses reflect acquisition costs and said that some of the hospitals it bought needed major investments.

But Kristina Minnick, a finance professor from Waltham, Mass.-based Bentley University, told The Globe that the company's financial statements are concerning. 

"They have more debt than assets," she said after reviewing the company’s financial reports. "They're in a really bad place financially."

Steward Health Care was founded in 2010 when the struggling Boston-based Caritas Christi Health Care system was sold to the private equity firm Cerberus Capital Management.  The system was converted into a private, for-profit company and renamed Steward. 

In 2016, Steward lined up a deal to sell its buildings to Medical Properties Trust, a real estate firm that now owns a 10 percent stake in the company, for $1.2 billion. Steward used this money to finance a national expansion, pay off debt and pay back Cerberus Capital. 

Part of its plan was expanding operations outside its Massachusetts hub, including its 2017 deal to buy IASIS Healthcare for $1.9 billion. The deal made it the largest private, for-profit operator in the U.S. 

Today, due to its expansion efforts in 2017 and 2018, the system operates 38 community hospitals and employs more than 40,000 healthcare professionals in the U.S. 

Read the full report here

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