Steward Health Care plans to shut down two Massachusetts hospitals next month, bringing the total number of closures in the Commonwealth this year to three.
Steward, a national 31-hospital system that owns eight hospitals in Massachusetts, has been soliciting bids for its entire network and physician group in bankruptcy. The Dallas-based system filed for Chapter 11 bankruptcy protection in May, leading to a Justice Department and congressional investigation into its restructuring plans.
A Steward spokesperson said in a statement issued Friday the organization is in final negotiations to sell six Massachusetts hospitals but could not find buyers for Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer. In April, the system closed a rehabilitation hospital in Stoughton.
"Despite the extensive sale process, which involved close coordination with lenders and regulators, there were no qualified bids for two hospitals, Carney Hospital and Nashoba Valley Medical Center, and, unfortunately, they will be closing on or around Aug. 31,” the spokesperson said.
Massachusetts Gov. Maura Healey (D) issued a statement Friday blaming Steward CEO Dr. Ralph de la Torre and Steward’s greed and mismanagement for the Carney and Nashoba Valley closures.
“It is time for Steward and their real estate partners to finally put the communities they serve over their own selfish greed,” Healey said. The U.S. Bankruptcy Court for the Southern District Court of Texas must approve the closures and Steward needs to notify the Massachusetts Public Health Department, she said.
On Thursday, the Senate Health, Education, Labor and Pensions Committee voted to subpoena de la Torre and launch a formal investigation of Steward’s bankruptcy filing.
Over the past year, Steward has struggled to pay vendors and its landlord, Medical Properties Trust, stoking congressional concern about additional hospital closures and potential fallout from corporate investment in healthcare. Lawmakers have criticized Steward’s financial dealings with private equity firm Cerberus Capital Management, which led Steward’s national expansion, and Medical Properties Trust, which bought Steward facilities and leased them back to the organization at high rents.
In response to the financial fallout, states including Massachusetts, California and Connecticut are considering laws designed to stop or, at a minimum, increase transparency in healthcare deals involving private equity firms and real estate investment trusts.
