The ongoing Steward financial saga: 24 things to know

Over the last few months, Dallas-based Steward Health Care has been subject to increased scrutiny regarding the health system's troubled finances and the status of its more than 30 hospitals across eight states. 

Backlash against Steward appears to be far from over as lawmakers, health leaders and community members continue to demand answers for how things got to this point, and Becker's has been closely following the health system's struggles. 

Here are 24 things to know about Steward: 

1. Medical Properties Trust, the largest hospital landlord in the U.S., revealed Jan. 4 that Steward had fallen approximately $50 million behind on year-end rent. MPT's current cash basis portfolio with Steward is $3.5 billion. 

2. Somerville, Mass.-based Mass General Brigham withdrew its physicians from Steward's Holy Family Hospital campuses in Haverhill and Methuen, Mass., in late January due to practice environment concerns that did not meet their patient safety care standards. The physicians returned to the two Steward hospital campuses on Feb. 9 after surgical items were replenished and conversations were held regarding staffing and supplies. 

3. Steward's Port Arthur-based Medical Center of Southeast Texas closed its Beaumont campus on Feb. 2, including its emergency department and all hospital-related services, due to the campus being underutilized, a spokesperson for Steward told Becker's.

4. Steward shared that it was throwing a financial safety net around its nine Massachusetts hospitals in early February, with no plans to close its hospitals in the state. 

5. While Steward hospitals continued to struggle financially, were unable to pay vendors, and lacked proper medical supplies, attention turned to Steward CEO Ralph de la Torre, MD, and his two yachts, valued at a combined $55 million. 

6. Steward's Miami-based North Shore Medical Center shuttered its neonatal intensive care unit and behavioral health unit Feb. 9 and closed its obstetrics unit Feb. 14, weeks earlier than its initial March 10 planned closure. The hospital, which has more than 700 employees in addition to over 400 medical staff, laid off around 152 people represented by 1199SEIU. A spokesperson for the union told Becker's that number could be larger, as their members did not represent all hospital employees.

7. Three different Utah lawsuits are seeking a combined $40 million in damages from Steward after investors claimed the health system took funding from its five hospitals in the state to pay acquired bills across other states. In Florida, the health system is also facing several lawsuits pertaining to its eight hospitals there. 

8. Steward issued a "six-point action plan" Feb. 23. The plan included a $150 million cash infusion from the health system's current lenders, new labor agreements, the immediate sale of non-essential assets, working with an advisory firm for restructuring, and compliance with Massachusetts lawmakers to develop a "go forward" plan. The plan was met with backlash from Massachusetts Gov. Maura Healey.

9. As New Bedford, Mass.-based Southcoast Health expressed interest in buying Steward's Fall River, Mass.-based Saint Anne's Hospital in early March, Steward shared plans that it is looking to transfer the ownership of all nine of its Massachusetts hospitals. 

10. U.S. Sen. Ed Markey invited Dr. de la Torre to testify at an April 3 field hearing in Boston regarding unanswered questions over the health system's troubled finances, but Dr. de la Torre did not show. The hearing also addressed for-profit companies' impact on healthcare access. 

11. Steward's Texarkana, Texas-based Wadley Regional Medical Center denied rumors that the facility is closing its doors on March 19. The denial comes as construction on the hospital's $227 million replacement facility has been paused since February. 

12. Steward's West Monroe, La.-based Glenwood Regional Medical Center closed its inpatient rehabilitation unit March 20.

13. Steward closed its Stoughton, Mass.-based New England Sinai Hospital on April 2. The 182-bed rehabilitation hospital had been open since 1927. Steward shared plans to close the hospital in early December due to "chronic low reimbursement rates" for Medicare and Medicaid service.

14. Kenney and Sams, a Boston law firm, filed a lawsuit against Steward March 25 and claimed that the health system owes it $605,306 for legal services rendered for more than six years, including interest and additional damages. 

15. Steward shared plans to sell its physician group to UnitedHealth Group's subsidiary Optum on March 26. Sen. Elizabeth Warren expressed concern over the sale not benefiting patients, healthcare workers, or guaranteeing the survival of Steward's facilities. The group has 1,700 physicians, according to Steward's website

16. Dr. de la Torre exchanged written responses with The Boston Globe in March through his lawyer and a company spokesperson. He detailed how it "has been the most stressful time in my life, but more importantly, I know that it has been even more stressful for the communities we serve." Dr. de la Torre also shared with the Globe that when Cerberus Capital Management, the private equity firm that founded Steward, wanted in 2020 to enter the health system into bankruptcy due to increased financial pressure from the COVID-19 pandemic, Steward's entire leadership team, including Dr. de la Torre, threatened to resign. 

17. Ms. Warren and Mr. Markey released an April 2 statement that accused Cerberus of profiting around $800 million from Steward and looting the health system when it exited in 2020. The statement came after Cerberus shared a Feb. 26 response letter to Massachusetts lawmakers' request for more information regarding Steward's financial struggles. 

18. Medical Properties Trust offloaded five Steward-operated Utah hospitals in April for around $1.1 billion in cash proceeds. The hospitals were leased to Englewood, Colo.-based Catholic Health Initiatives Colorado, part of Chicago-based CommonSpirit Health.

19. Ms. Healey's administration began holding a series of regional meetings with hospitals and community health centers on April to discuss Steward's ongoing financial difficulties at its Massachusetts hospitals. The meeting participants included the Massachusetts Department of Public Health, the Massachusetts Health and Hospital Association, and the Massachusetts League of Community Health Centers. 

20. Hematology oncology services were temporarily paused at Steward's Brockton, Mass.-based Good Samaritan Medical Center in mid-April after its provider left. The outpatient services were provided by an independent physician practice and not run by the hospital. 

21. Rallies were held outside of Steward Massachusetts hospitals ahead of the health system's April 30 loan agreement deadline out of concern that the facilities could be negatively affected. The loan agreement was part of Steward's "six-point action plan" from late February (mentioned above in number eight).

22. Massachusetts health department officials launched an incident command system to protect care access and to reduce any potential disruption of services at Steward's state hospitals. The command system aims to support coordination between hospitals, labor groups, state agencies, community health centers, and other stakeholders.

23. Steward filed for Chapter 11 bankruptcy on May 6 to keep operations running at its existing hospitals and clinics. The health system shared in a May 6 news release that it would receive an initial $75 million from Medical Properties Trust through plans to finalize terms of debtor-in-possession financing, and could be eligible for an additional $225 million from its landlord. Medical Properties Trust shared that it expects Steward to use the $75 million to maintain patient care while it "accelerates the re-tenanting of hospitals to new operators." However, the landlord did not share plans to provide any additional funding to the health system. 

24. During a May 7 court hearing in Houston, Steward attorney Ray Schrock told U.S. Bankruptcy Judge Chris Lopez that the health system had placed its 31 U.S. hospitals up for purchase to help offload its $9 billion debt after it filed for bankruptcy, Reuters first reported May 7. Mr. Schrock said that Steward is hoping to keep its hospitals open and to finalize the sale of its facilities by the end of the summer. 

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars