Steward Health Care has worked out deals to sell its physician group and most of its hospitals, but policy experts remain concerned the hospital chain’s unwinding will hurt healthcare access and quality.
Steward in May filed for Chapter 11 bankruptcy protection with plans to sell its entire 31-hospital network. State and federal lawmakers blamed Steward's troubles on corporate investors’ involvement in an expansion plan that left the for-profit provider with more debt and high costs. Steward Health Care CEO Ralph de la Torre may face criminal charges after defying a subpoena to testify before a Senate committee about the company's financial problems.
Related: HonorHealth to take over several Steward facilities
The U.S. Bankruptcy Court for the Southern District of Texas has approved definitive agreements for Steward to sell more than two dozen hospitals and its Stewardship Health physician group.
Steward did not respond to a request for comment. Here’s where the deals stand.
Arkansas
On Sept. 20, Christus Health, a Catholic health system based in Irving, Texas, announced plans to acquire Steward’s Wadley Regional Medical Center in Texarkana, Texas. Judge Christopher Lopez on Tuesday approved the proposal, which still requires regulatory approval.
Arizona
Medical Properties Trust, which along with Macquarie Asset Management is the landlord for Steward properties, agreed last month to take over and find operators for 15 hospitals in five states, including Arizona. It suspended rent payments for all 15 hospitals through 2024.
Lopez approved the proposals Sept. 17 and designated new operators, effective Sept. 11. Federal and state regulators are expected to sign off by Oct. 1.
Scottsdale, Arizona-based HonorHealth is managing three Arizona hospitals — Tempe St. Luke's Hospital, Mountain Vista Medical Center in Mesa and Florence Hospital.
Florida
As part of the Medical Properties Trust transaction, Glendale, California-based American Healthcare Systems is operating Coral Gables Hospital, Hialeah Hospital, Florida Medical Center in Fort Lauderdale, North Shore Medical Center in Miami and Palmetto General Hospital in Hialeah.
Separately, Florida-based Orlando Health plans to acquire three Steward hospitals in Florida for $439 million. Lopez approved the agreement Sept. 11, and the parties expect the transaction to close by Oct. 23, pending regulatory approval.
Texas
Under the Medical Properties Trust agreement, American Healthcare Systems is operating Medical Center of Southeast Texas in Port Arthur and St. Joseph Medical Center in Houston.
Also, Brentwood, Tennessee-based Quorum Health is managing Scenic Mountain Medical Center in Big Spring and Odessa Regional Medical Center.
Louisiana
American Healthcare Systems is operating Glenwood Regional Medical Center in West Monroe as part of the Medical Properties Trust transaction.
Ohio
Under the Medical Properties Trust transaction, Flint, Michigan-based Insight Health System is managing Trumbull Regional Medical Center and Hillside Rehabilitation Hospital. Steward had intended to close the two Warren, Ohio-based hospitals.
Pennsylvania
Pennsylvania-based Meadville Medical Center announced plans Aug. 16 to acquire Steward’s Sharon Regional Hospital in Pennsylvania. The transaction could close by Dec. 1, pending court and regulatory approval.
Massachusetts
On Sept. 4, the court approved the sale of six Massachusetts hospitals as part of a $343 million deal. The transactions are expected to close Sept. 30, pending regulatory approval.
Under the agreements, Rhode Island-based Lifespan Health System would acquire Saint Anne's Hospital in Fall River and Morton Hospital in Taunton for $175 million. Boston Medical Center would pay $140 million for Good Samaritan Medical Center in Brockton and St. Elizabeth's Medical Center in Boston. Lawrence General Hospital plans to purchase Holy Family Hospitals in Methuen and Haverhill for $28 million.
The Massachusetts Health Policy Commission said during a Sept. 19 board meeting it is still reviewing the specifics of the deals.
“It’s really important through this review process to really hone in on the access piece, and if they have plans to change service lines that they are really clear about that and what those impacts could be,” Commissioner Tim Foley said during the meeting.
Steward closed Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer Aug. 31, resulting in more than 1,200 layoffs.
Stewardship deal
The court on Aug. 16 approved private equity-owned Rural Healthcare Group’s plan to acquire Stewardship for $245 million. The transaction is expected to close Oct. 30, pending regulatory approval. Stewardship is based in Massachusetts and operates in nine states.
Rural Healthcare Group owns and operates 17 primary care clinics in North Carolina and Tennessee. It is owned by Kinderhook Industries, a private equity firm.
The number of physicians who would remain in network with the six Massachusetts hospitals changing hands would be somewhat reduced, according to staff at the Massachusetts Health Policy Commission. However, a high percentage of referrals flow to and from Steward physicians and those hospitals, so staff said Rural Healthcare Group has an incentive to not significantly limit in-network status.
Commissioners sought more information on if and how Rural Healthcare Group changed staffing levels or service offerings after completing previous acquisitions.
“Leadership of Kinderhook and Rural Healthcare Group has made it clear they want to be understood for their track record and performance, knowing there have been concerns in our state around private equity and what those investments mean for the long-term health of these organizations,” said commission Chair Deb Devaux during the meeting. “They have been in discussions and very willing to have those conversations.”
