Steward Health Care said Friday it has secured a deal to help stabilize operations and keep its Massachusetts hospitals open for now, while it pursues efforts to find a new financial backer. However, the company indicated it will consider transferring ownership of one or more of its medical centers to another company.
"Despite troubling news reports about our Massachusetts hospitals, I want to inform you that Steward has agreed upon the principal terms for a significant financial transaction to help stabilize our company," Steward's Executive Vice President Michael Callum wrote in a memo to staff.
Callum said the financing will allow the for-profit health care company to continue operations at its nine Massachusetts hospitals, adding "to be clear we have no current plans to close any of our hospitals in Massachusetts." The memo goes on to say the bridge financing will provide capital and the "time needed for Steward to consider transferring one or more of our hospitals to other operators."
Along with the bridge financing, the memo indicated the company is in the process of seeking a backer for its physician group. "We are confident that both transactions will provide us with the necessary funds to get us through this challenging time," Callum wrote.
Steward's financial difficulties have put the future of its Massachusetts hospitals in doubt. They include St. Anne's Hospital in Fall River, St. Elizabeth's Hospital in Brighton, Good Samaritan Medical Center in Brockton, Carney Hospital in Dorchester, Holy Family Hospital in Methuen and Haverhill and Morton Hospital in Taunton.
The company is in the process of closing New England Sinai Hospital, a rehabilitation facility in Stoughton.
Union leaders representing many of Steward's 16,000 Massachusetts employees expressed relief after receiving the company's announcement.
"I think it's a good sign that there is stability for some duration as a longer term plan is put in place to insure that these hospitals remain open," said Tim Foley Executive Vice President of 1199 SEIU, the union representing about 5,000 Steward workers.
Steward has said its financial difficulties are largely due to low reimbursement rates for publicly insured patients and pressures related to the COVID-19 pandemic.
State officials have been in talks with the company for some time to come up with a plan for its Massachusetts facilities.
The head of the Massachusetts Nurses Association, which represents more than 3,000 Steward nurses and other employees, said a permanent solution is needed to stabilize the company's hospitals and ensure better oversight in the future.
“While we appreciate this temporary reprieve, decisions must be made in the coming weeks to ensure the orderly transition of Steward facilities so that these communities continue to receive the care they need and that surrounding hospitals are not overwhelmed by the prospect of potential closures," the union's president, Katie Murphy, said in a statement.
The state Department of Public Health is closely monitoring Steward's financial situation and its facilities, including conducting daily visits at Steward hospitals, officials said.
"We are working together with Steward to maintain stability for both patients and
staff, including safety and quality monitoring by our own Department of Public
Health teams on the ground at Steward sites," state Secretary of Health and Human Services Kate Walsh said in a statement.
Questions have been raised about Steward's ability to continue safely providing patient care due to a lack of staff and supplies. The Boston Globe reported that a patient at St. Elizabeth's Medical Center might have been saved by a piece of equipment that had been repossessed by a vendor. Walsh said the state's monitoring visits include "a review of hospital staffing, daily patient census, and supplies and services provided.
"In addition, DPH is investigating any concerns related to all Steward facilities," Walsh said.
This story is developing. It will be updated as more information may become available.
This article was originally published on February 02, 2024.