Steward Hospital laying off 1200+ Employees in Massachusetts

Photo byWBUR

Steward Health Care has filed for Chapter 11 bankruptcy protection and announced plans to close two hospitals in the state. This decision will result in the loss of over 1,200 jobs, significantly impacting the local communities.

Steward Declines Acquisition Offer

Prior to implementing the closures, Steward Health Care declined an offer to buy all eight of its Massachusetts facilities from Insight Health, a company based in Michigan. WBUR, an NPR affiliate in Boston, reports that Steward determined the offer was not feasible. Insight Health had expressed willingness to assume the costly lease payments to Steward’s de facto landlords.

"Insight made a bid for all of Steward's Massachusetts hospitals and we indicated a willingness to negotiate terms and lease payments," said Atif Bawahab, Insight’s chief strategy officer. "A mutual agreement was not reached, but we remain interested in being part of the solution to keep the hospitals' doors open."

Hospitals Closing This Month

Steward is set to close Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer by the end of August, citing the lack of "qualified" bids for these hospitals. Federal bankruptcy Judge Christopher Lopez approved Steward's request, affirming the legal standards for the closures were met.

There will be 490 layoffs at Nashoba Valley Medical Center and 753 at Carney Hospital. Steward and state representatives are attempting to help impacted workers get other employment. The Massachusetts Nurses Association has called for legislative assistance to save the hospitals in response to their closure, and Carney employees recently staged a rally in Dorchester to call on legislators to step in.

Financial Challenges and Asset Ownership

Steward sold its Massachusetts real estate to Medical Properties Trust in 2016, with the assets now jointly owned by MPT and Macquarie Asset Management. Apollo Global Management also plays a role as a lender to MPT and Macquarie. Steward’s financial struggles escalated with missed lease and vendor payments, culminating in a Chapter 11 filing in Texas this past May.

Steward is reportedly in negotiations with unnamed buyers for its other Massachusetts facilities, a process described by a Steward lawyer as "immensely complex."

Criticism of Company Leadership

Massachusetts Governor Maura Healey and Senators Edward Markey and Elizabeth Warren have criticized Steward CEO Dr. Ralph de la Torre, holding him responsible for the company’s financial difficulties. They accuse de la Torre of taking the company’s nonprofit hospitals public and selling the land to Medical Properties Trust and Macquarie Infrastructure Partner.

The Senate Health, Education, Labor and Pensions Committee is investigating the bankruptcy and has subpoenaed de la Torre to testify at a hearing scheduled for September 12. Additionally, federal authorities in Boston have launched a separate investigation into the bankruptcy proceedings.

In Florida, Steward operates several hospitals, including Coral Gables Hospital, Hialeah Hospital, North Shore Medical Center, and Palmetto General Hospital in Miami-Dade County, as well as others in Broward, Brevard, and Indian River counties. The sale of these hospitals is anticipated to occur during the second phase of the bankruptcy plan.

As the situation unfolds, the future of Steward Health Care's operations and its impact on employees and communities remain uncertain.

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