Biggest hospital bankruptcy in decades affects 2.2 million patients across eight states
Steward Health Care, the largest private hospital chain in the US, filed for Chapter 11 bankruptcy in Houston, Texas, with a massive $9 billion debt burden. The company, operating 31 hospitals, aims to sell all its facilities to address financial woes while ensuring continuous healthcare access for communities.
The bankruptcy filing laid bare Steward's financial struggles, citing liabilities in unpaid loans, rent obligations, vendor bills, and employee wages. Despite an annual revenue of $6 billion, the debt was unsustainable, leading to the decision to seek bankruptcy protection.
Efforts to avoid bankruptcy included attempts to sell its physician group, Stewardship Health Care, but regulatory hurdles hampered this strategy. Emergency financing of $75 million was secured from landlord Medical Properties Trust, with plans for an additional $225 million loan.
While undergoing bankruptcy proceedings, Steward commits to maintaining normal operations across its hospitals, medical centers, and physician's offices. However, financial pressures have caused operational disruptions, such as postponed surgeries and staff attrition due to payment delays.
Massachusetts officials expressed concern over Steward's financial management, particularly regarding real estate deals and long-term rent commitments. Attorney General Andrea Joy Campbell highlighted the need to scrutinize potential impacts on patient care, signaling potential legal actions if violations are identified.
Operating hospitals across eight states, Steward's financial woes have led to challenges in bill payments and emergency funding, impacting patient services with instances like bat infestations and surgery postponements due to unpaid vendors.
CEO Dr. Ralph de la Torre stressed that the bankruptcy filing is a necessary step to safeguard patients, staff, and communities' interests. Collaboration with Medical Properties Trust has been crucial in sustaining operations amidst financial turbulence.
In response to the bankruptcy, Massachusetts authorities are actively seeking new owners for Steward hospitals to ensure ongoing healthcare access. Governor Maura Healey emphasized the importance of protecting patients, jobs, and healthcare market stability during this transition.
Steward remains committed to safety standards and compliance, working closely with state authorities to uphold quality healthcare services during the bankruptcy process. The situation reflects broader challenges faced by private equity-backed medical companies, underscoring the intricate financial dynamics within the healthcare industry.
