PROVIDENCE − Lifespan will assume control of Saint Anne's Hospital in Fall River and Morton Hospital in Taunton, Massachusetts, Gov. Maura Healey announced Friday.
Steward Health Care, which runs eight Bay State hospitals including Saint Anne's and Morton, declared bankruptcy in May and is in the process of selling or closing its hospitals. On Monday, it agreed to sell its physician network , which serves more than 800,000 patients nationwide via roughly 3,250 affiliates, to Nashville-based Rural Healthcare Group for $245 million in cash.
Healey announced on Friday that deals principle have been reached to transition operations at four Steward hospitals – Saint Anne’s Hospital, Good Samaritan Medical Center, the Holy Family Hospitals and Morton Hospital – to new operators. She also announced that her administration will take control of a fifth hospital, Saint Elizabeth’s, through eminent domain to facilitate the transition to a new owner and keep the hospital open.
“Today, we are taking steps to save and keep operating the five remaining Steward Hospitals, protecting access to care in those communities and preserving the jobs of the hardworking women and men who work at those hospitals,” Healey said in a news release. “Our team under [Health and Human Services] Secretary Kate Walsh worked day in and day out to secure new, responsible, qualified operators who will protect and improve care for their communities."
In a statement provided by Jessica Wharton, a spokesperson for Lifespan, the Rhode Island health system said it is finalizing the terms of a bid to purchase the two Massachussets hospitals.
“Once the bid is finalized and Steward and Apollo (owners of the hospital properties) designate the bid as the best bid it will then be filed with the bankruptcy court, since the terms of our purchase are subject to the court’s approval. Furthermore, the transaction will also require state and federal regulatory approvals, as well as satisfaction of sale contingencies,” the statement said.
What hospitals does Lifespan already own?
Lifespan was founded in 1994 by Rhode Island Hospital and The Miriam Hospital. According to its website, Lifespan is an integrated, academic health system with The Warren Alpert Medical School of Brown University, and its partners include Rhode Island Hospital's pediatric division, Hasbro Children's Hospital; Bradley Hospital; Newport Hospital; Gateway Healthcare; Lifespan Physician Group; and Coastal Medical.
Lifespan already operates a Hasbro Children's Specialty Practice in Fall River.
What to know about Saint Anne's and Morton hospitals
According to Saint Anne’s website, the hospital was founded in 1906 and offers 211 beds. It employs more than 1,500 staff, including more than 750 primary care and specialty providers. The hospital offers diagnostic, emergency, cancer care and surgery, among other services.
Morton notes on its website that it offers 144 beds. Among its services are emergency care, cardiology, orthopedics and cancer care, among others.
Steward's financial troubles
In January, the Enterprise reported that Steward owed $50 million in back rent for its properties.
At the time, Steward blamed its financial troubles in a widening gap in Medicare and Medicaid reimbursements; Steward's mission is to serve the most marginalized patients, which means about 70% of the payments it receives come from Medicare and Medicaid.
"Over the past decade plus, there has been a widening gap in reimbursement for all the state’s community hospitals compared to larger, academic medical centers," Steward said in a Friday statement. "This gap has only continued to increase and most community hospitals – including Steward hospitals in Massachusetts – are suffering losses that jeopardize their ability to continue to offer services."
Steward's bankruptcy filing revealed:
- It owes money to more than 100,000 creditors.
- The largest single unsecured claim in the filing is $71 million owed to Change Healthcare , a healthcare technology company itself owned by Optum. That's the healthcare giant Steward has been trying to sell its physicians' practice to .
- The company's unsecured debts include $28 million to the Internal Revenue Service. This includes debt connected to the CARES Act, in which the federal government gave out $2 trillion in COVID relief.
- Medical device providers figure prominently in the list of largest unsecured creditors, including $50 million owed to Philips North America.
- Among local companies who are now in line asking to be repaid is Boston Scientific in Marlborough (owed $5.4 million) and Lexington's ProMedical (which has a claim for $5.2 million.)
- Steward indicated its debts range between $1 billion and $10 billion. The company checked a box saying its assets are in that same wide range.
With reports from The Enterprise of Broctkon. This story will be updated.
This article originally appeared on The Providence Journal: Lifespan to take control of Saint Anne's, Morton hospitals amid Steward bankruptcy
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