Steward Health Care filed for Chapter 11 bankruptcy in Texas on Monday On Tuesday, it announced it was putting all 31 US hospitals up for sale The hospital network has been severely criticized for its financial decisions The company said it would continue day-to-day operations at its hospitals
Steward Health Care has put all 31 of its hospitals up for sale, after filing for bankruptcy on Monday.
The largest private hospital chain in the US hopes to finalize all transactions by the end of the summer to address $9 billion in debt, its attorneys said at a Tuesday court hearing in Texas.
Steward, which runs hospitals in eight states, hopes to keep all hospitals open in the long term, attorney Ray Schrock said.
‘Our goal remains that there are zero hospitals closed on our watch,’ he said. ‘There’s going to be a change in ownership in many hospitals, we recognize that. But we don’t want to see any of these communities fail to be served.’
Steward filed for Chapter 11 bankruptcy in Houston, Texas, on Monday after months of financial instability.
Steward Health Care, which is the largest private hospital chain in the US, filed for Chapter 11 bankruptcy in Texas on Monday after months of financial instability (Pictured: St. Elizabeth’s Medical Center in Boston, Massachusetts)
In court documents filed before the hearing, Steward said it had over $9 billion in total liabilities, including $1.2 billion in loans, $6.6 billion in long-term rent obligations, nearly $1 billion in unpaid bills from medical vendors and suppliers, and $290 million in unpaid employee wages and benefits.
The for-profit chain – which operates 31 hospitals across eight states and cares for 2.2 million patients a year – had $6 billion in annual revenue before filing for bankruptcy.
Shrock said it has been pursuing a sale of its physician group, Stewardship Health Care, for an amount that would repay the company’s loans and allow it to pay some of its vendors.
Steward had hoped to use the proceeds of that sale to avoid bankruptcy. But stalled regulatory approvals forced the company to seek short-term emergency financing that did not give Steward enough cash to continue operations for long, he added.
At Tuesday’s hearing, the company was able to borrow $75 million from its landlord Medical Properties Trust.
It also hopes to borrow an additional $225 million from the landlord later in its bankruptcy.
After filing for bankruptcy Monday, Steward bosses said they would continue day-to-day operations as normal at its hospitals, medical centers and physician’s offices during its bankruptcy.
After it closed a hospital in Massachusetts, officials in the state heavily criticized the company over its financial decisions.
In particular, they criticized a series of transactions that sold off the company’s real estate and saddled it with long-term rent costs at its hospitals.
Democratic Massachusetts Attorney General Andrea Joy Campbell said Steward’s bankruptcy should provide state officials with more insight into the company’s financial condition and whether it compromised patient care in its pursuit of profits.
‘If those efforts have violated the law, those involved will absolutely hear from my office,’ Campbell said at a Monday press conference.
Alongside Massachusetts, Steward also operates hospitals in Arizona, Arkansas, Florida, Louisiana, Ohio, Pennsylvania and Texas.
The chain has been struggling with its finances for months, and has been failing to pay bills and taking out emergency loans, The Wall Street Journal reported.
In one Steward hospital in Florida, there was a bat infestation in an intensive-care unit, while surgeries have been postponed in others due to vendors not being paid.
Traveling nurses have left jobs at other Steward hospitals after their temporary agency said it had not been paid, the outlet reported.
‘Steward Health Care has done everything in its power to operate successfully, said CEO Dr. Ralph de la Torre
‘Steward Health Care has done everything in its power to operate successfully in a highly challenging health care environment, said Chief Executive Officer Dr. Ralph de la Torre in a statement.
‘Filing for Chapter 11 restructuring is in the best interests of our patients, physicians, employees, and communities at this time.’
Steward has so far been kept afloat by its relationship with its landlord Medical Properties Trust, which owns 10 percent of the company and has put billions of dollars into the company’s real estate.
The company filed for Chapter 11 bankruptcy protection with between $1 billion and $10 billion in liabilities in a bankruptcy court in Houston, Texas.
In Massachusetts, where Steward accounts for around 7 percent of hospital capacity in the state, regulators have been making contingency plans.
Kate Walsh, the Secretary of Health and Human Services in the state, said they are working to find new owners for Steward hospitals to protect access to healthcare in Massachusetts.
‘We will be advocating as strongly and as aggressively as possible for Massachusetts’ interests’ during the bankruptcy proceedings, Governor Maura Healey said.
Alongside Massachusetts, Steward also operates hospitals in Arizona, Arkansas, Florida, Louisiana, Ohio, Pennsylvania and Texas
‘Those interests are patients, jobs and the stability of the healthcare market.’
Officials in the state have created a website to provide information and resources for patients, workers and community members as they navigate the bankruptcy filing.
Steward has said it is working with the state to ensure its hospitals and medical centers are compliant with safety standards.
Across the US, Steward has nearly 30,000 employees, including 4,500 primary and specialty care physicians at 400 facility locations.
Several private equity-backed medical companies have filed for bankruptcy in recent years, including hospital staffing companies Envision Healthcare and American Physician Partners, and prison health company Tehum Care Services.
