Massachusetts governor urges health system to transfer hospitals: ‘The time has come’

Citing Steward Health Care’s financial struggles and concerns of patient safety, Massachusetts Gov. Maura Healey is pressing the system to relinquish control of its hospitals in the state.

Massachusetts Gov. Maura Healey has urged Steward Health Care to transfer ownership of its hospitals in the state. (Massachusetts governor's office)

In a Feb. 20 letter sent to Steward CEO Ralph de la Torre, Healey says she wants the hospital to move ahead with plans to transfer the facilities to new owners. Healey also pressed for the system to release long-sought financial information.

Healey urged Steward to ensure safe staffing. She also warned that state officials will take whatever steps are necessary to protect patients, including freezing admissions, closing beds, transferring patients to other facilities, and canceling procedures.

“The time has come to move past our many months of discussions and begin executing a safe, orderly transition of your seven licensed facilities in Massachusetts to new operators as soon as possible,” Healey wrote in the letter.

Healey also said she expects to receive financial information about the system by the end of business on Friday, Feb. 23. She called on de la Torre to allow increased monitoring of Steward’s hospitals in Massachusetts, and noted in her letter that state and federal officials have been onsite at the facilities in response to “patient safety events.”

Steward, a for-profit system based in Dallas, operates 33 community hospitals in nine states. The system has been facing steep financial challenges.

Citing insufficient reimbursements and the impact of the COVID-19 pandemic, Steward said its Massachusetts hospitals “are suffering losses that jeopardize their ability to continue to offer services," WBUR-TV reported.

In early February, Steward said it had secured financing to keep its Massachusetts hospitals open, WBZ-TV reported. Steward said it had no plans to close the hospitals and was in talks for a deal or sale involving the facilities.

In her letter, Healey said Steward has failed to demonstrate the transparency of other health systems and rebuffed a court order to disclose its financial information.

“We need an accurate and complete view and understanding into how this happened and where things stand. Now is the time to put your patients, staff, and communities first,” Healey wrote.

Steward’s hospitals in Massachusetts have been a concern of state officials in recent weeks.

U.S. Sen. Elizabeth Warren, D-Mass., U.S. Sen. Ed Markey, D-Mass., and the other nine members of the state’s congressional delegation have been pressing Steward about its finances and plans to ensure patients get the care they need. They warned that any hospital closures would deal a blow to patients’ access to care, and pointed to the 16,000 Steward employees in Massachusetts. In a Jan. 23 letter, they said, “Residents, workers, regulators, and elected officials must have a seat at the table for conversations about Steward’s plans for the future to ensure continued access to high quality medical care in their communities.”

The Massachusetts delegation has also written a letter to Cerberus Capital Management, the private equity firm, asking questions about its role in Steward’s financial difficulties. Cerberus owned the Massachusetts hospitals from 2010 until 2021.

The lawmakers asked questions about Cerberus’ sale of the hospitals’ properties to Medical Properties Trust, which resulted in Steward paying millions of dollars in lease payments annually. In the Feb. 15 letter, the lawmakers said the sale left Steward with “long-term liabilities that are magnifying – if not creating – the current crisis.”

Medical Properties Trust, Inc. said in January that as of Dec. 31, Steward owed $50 million in unpaid rent.

Steward operates the following hospitals in Massachusetts: Carney Hospital in Dorchester; Good Samaritan Medical Center in Brockton; Holy Family in Haverhill and Methuen; Morton Hospital in Taunton; Nashoba Valley Medical Center in Ayer; New England Sinai Hospital in Stoughton; Norwood Hospital; Saint Anne’s Hospital in Fall River; and St. Elizabeth’s Medical Center in Brighton.

In February 2023, Steward sold five hospitals in Utah to CommonSpirit Health.