Steward Health Care says it has deal to keep most hospitals open

Steward Health Care says it has a deal with its landlord, Medical Properties Trust, to help move its hospitals to new ownership and ensure most of the hospitals will survive.

Steward Health Care said Friday that it has a deal with its landlord, Medical Properties Trust, to help transfer its hospitals to new ownership and ensure most of the hospitals will survive. Above, nurses and residents rallied Thursday outside Trumbull Regional Medical Center in Ohio; the hospital was slated to close next month. (Image: Ohio Nurses Association)

Steward said late Friday that it has reached an agreement in principle with Medical Properties Trust that would facilitate the transfer of hospitals to new interim operators. Steward said in a news release the deal creates a path to keep “the majority of Steward hospitals open.” The company said it would help preserve nearly 30,000 jobs and avoid expensive court battles.

The health system says the agreement allows for the transfer of hospitals under Medical Properties Trust’s master lease to new interim operators, and MPT will finance ongoing operational costs.

Dr. Ralph de la Torre, CEO of Steward Health Care, hailed the agreement, which he said followed “exhaustive” efforts.

“This is a crucial and positive development today in our ongoing effort to transition Steward hospitals to new operators, pay Steward's debts, and support our patients, employees, and the communities we have had the privilege of serving for many years," he said in a statement.

"We are extremely pleased that this potential agreement creates a path that we hope will enable all remaining Steward hospitals to stay open and allows our dedicated staff of providers and others to devote their full attention to patient care," he added.

Steward said the system and MPT have also agreed on the “release of billions of dollars of claims held by MPT against Steward.”

Steward has been trying to sell its hospitals since declaring bankruptcy earlier this year. Medical Properties Trust owns Steward’s hospital properties, and Steward said it had owed $9 billion when declaring bankruptcy.

The agreement also allows Steward to retain the proceeds of sales from three hospitals on Florida’s “Space Coast” to pay lenders and creditors. Orlando Health has put in a $439 million bid to purchase the three hospitals.

Steward is seeking court approval on the tentative agreement as soon as possible, with hopes of a hearing to take place Sept. 10, the system said.

The news comes as two Steward hospitals in Massachusetts, Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer, closed Saturday morning. Both hospitals said on their websites Saturday morning that they are permanently closed and no longer accepting patients.

In addition, two Steward facilities in Warren, Ohio are scheduled to shut their doors next month: Trumbull Regional Medical Center and Hillside Rehabilitation Hospital.

The Ohio Nurses Association, which has been fighting to prevent the closure of the Ohio hospitals, expressed cautious optimism after the news of the agreement was announced. The nurses association has been pressing Ohio Gov. Mike DeWine’s administration to take more aggressive measures to save the hospitals.

Rick Lucas, president and executive director of the Ohio Nurses Association, said in a statement Friday night that the news is a positive development but “it is only a small step in the right direction.”

“For these hospitals to remain viable and effectively serve the community, Steward Health must resume full operations immediately,” Lucas said. He pointed out at Hillside, the number of patients has dropped from 28 when the closure plans were announced earlier this month to 11 this weekend.

On Friday, Ohio Attorney General Dave Yost filed a petition in support of some local groups seeking an injunction to prevent the closure of Trumbull Regional and Hillside. Yost had requested an emergency hearing to take place Sept. 3. Local business groups are banding together to raise money to keep the hospitals open.

“Hospitals are lifelines for our communities, and the threat of closure due to financial strain means gambling with people’s lives,” Yost said in a statement. “The health and well-being of Ohioans should never be sacrificed for the bottom line.”

Lucas called for Yost and Ohio state officials to work to ensure the hospitals aren’t closed.

“We continue to urge Governor DeWine to take decisive action to ensure these hospitals remain open,” Lucas said in his statement Friday. “We are calling on him to meet with stakeholders, support legislative efforts, and use his influence to advocate for the full resumption of services at Hillside and Trumbull. The future of healthcare in our community depends on it.”

Nurses, union leaders, and some elected officials held a rally Thursday night to save Trumbull Regional and Hillside. Hundreds showed up for the rally in Warren, a city of 39,000 just over an hour from Cleveland.

In a letter sent to DeWine this week, the nurses association says shutting down the facilities could endanger lives.

A group of local business leaders, dubbed Warren City Hospital, Inc., has been working to line up the money to buy and operate Trumbull Regional. The group has said it intends to find a way to get a deal done to preserve the facility.

Western Reserve Health Education is also trying to keep Trumbull Regional open with a $20.5 million bid, and joined with Warren City and others to get an injunction to keep the facility open until at least November, WKBN-TV reported. Western Reserve Health Education runs residency programs at Trumbull Regional and Hillside.

The United Way of Trumbull County has also launched a fundraising campaign to help raise some of the money that is needed to keep the hospitals open.

In Massachusetts, residents, healthcare workers, and local officials have been trying to convince Gov. Maura Healey’s administration to save the two hospitals slated to close.

Steward said Friday that it had lined up deals to sell six of its hospitals in Massachusetts. Earlier this month, Healey announced plans to preserve five former Steward hospitals in Massachusetts, lining up new ownership for those facilities and providing $30 million to help keep them afloat.

Elected officials, including U.S. Sen. Elizabeth Warren, D-Mass., and other lawmakers have hammered Steward’s management of its facilities and decried the dangers of private equity ownership of hospitals.