Dallas-based Steward Health Care plans to sell its physician group to UnitedHealth Group's subsidiary Optum, The Boston Globe reported March 26.
The proposed sale of Stewardship Health is part of the 33-hospital system's plan to shore up its finances amid ongoing challenges, including falling behind in paying bills and rents. If approved, physicians who work at Steward facilities across nine states would be employed by Optum, the largest employer of physicians in the U.S.
In February, Steward shared a "six-point action plan" to tackle its financial troubles and create a more sustainable business.
As part of that plan, Steward and its lenders inked a financing agreement that provided a $150 million cash infusion in additional liquidity as the health system "marches towards the sale of its highly desired asset physician group Stewardship Health." Steward said the cash infusion would give it some breathing room to reset its operations and address vendor obligations.
Collaborative Care Holdings, an Optum subsidiary, filed a notice with Massachusetts' Health Policy Commission to acquire the physician group for an undisclosed amount. The HPC has 30 days to assess the effects of the proposed transaction on healthcare costs, quality, access and equity, but has the ability to conduct a more extensive review, according to the Globe.
However, the proposed sale has drawn scrutiny from lawmakers, many of whom have been calling out the negative effects of private equity ownership on healthcare costs and care quality.
"Steward's latest plan raises more serious questions about the future of the Massachusetts healthcare system," Sen. Elizabeth Warren said in a March 26 statement. "My top priority is ensuring Steward's Massachusetts hospitals remain open. But Steward executives have no credibility, and I am concerned that this sale will not benefit patients or healthcare workers, or guarantee the survival of these facilities. It would be a terrible mistake for Steward to be allowed to walk away while looting Massachusetts hospitals one more time."
New Bedford, Mass.-based Southcoast Health is considered to be one of the frontrunners to acquire Saint Anne's Hospital in Fall River from Steward, which, earlier this month, shared its intention to transfer ownership of its nine acute care hospitals in Massachusetts.
On April 2, Steward will close its Stoughton, Mass.-based rehabilitation hospital, New England Sinai Hospital.
Outside of Massachusetts, service cuts and closures have hit various Steward facilities.
Last May, Steward closed Texas Vista Medical Center, a 325-bed hospital in San Antonio. Last month, the Medical Center of Southeast Texas in Port Arthur, another Steward affiliate, closed its Beaumont campus.
Ms. Warren also raised concerns about Optum — which has almost 90,000 employed or affiliated physicians — potentially acquiring Stewardship Health.
"[It] is already the largest employer of physicians in the country — controlling over 10% of American doctors — which means this deal raises significant antitrust concerns in Massachusetts and nationally," Ms. Warren said. "The Department of Justice is already reportedly investigating UnitedHealth's relationship with its Optum health services arm."
Becker's has reached out to Steward and Optum and will update this story as more information becomes available.