Deals, buyers outlined for five Steward hospitals

BOSTON — "Enough is enough," Gov. Maura Healey declared Friday as she announced that all the bankrupt Steward Health Care hospitals still up for sale have new owners lined up and that the state is going to assist in the transitions with financing and, in one case, the use of its property-taking powers.

The governor said deals in principle have been struck to transition four Steward hospitals on five campuses to new owners: Lawrence General Hospital will buy the Holy Family Hospital facilities in Methuen and Haverhill, Lifespan will take over Morton Hospital in Taunton and St. Anne’s Hospital in Fall River, and Boston Medical Center will buy Good Samaritan Medical Center in Brockton, as long as the deals are finalized and approved.

Massachusetts state government will take the fifth for-sale hospital, St. Elizabeth's Medical Center in Brighton, by eminent domain in order to keep it open before it is also transitioned under BMC's control, Healey said.

The sweeping transition and health care market restructuring plan that Healey announced Friday is expected to require significant involvement from the Legislature. The governor's office said it has been working with lawmakers on "a fiscally responsible financing plan that includes cash advances, capital support and maximizing federal matches" to support the transition to new operators.

At press time Healey, Health and Human Services Secretary Kate Walsh and Public Health Commissioner Robbie Goldstein were to hold a State House press conference at 1 p.m. Friday.

More Healey: Fate of Steward hospitals 'in the hands of the lenders'

"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 hard-working women and men who work at those hospitals," Healey said. "Our team under Secretary Kate Walsh worked day in and day out to secure new, responsible, qualified operators who will protect and improve care for their communities. We’re grateful for the close collaboration of the Legislature to develop a fiscally responsible financing plan to support these transitions."

Healey said that the sticking point around St. Elizabeth's was that the hospital's landlord and its mortgage lender "have repeatedly chosen to put their own interests above the health and well-being of the people of Massachusetts."

"Enough is enough. Our administration is going to seize control of Saint Elizabeth’s through eminent domain so that we can facilitate a transition to a new owner and keep this hospital open," the governor said, without providing additional details. The taking of private property, though, is likely to require legislative approval.

The Fifth Amendment to the Constitution gives governments the power to take private property "by eminent domain" — regardless of the owner's wishes — so long as the government proves the property is needed for a public use and the owner is paid fairly for the property.

A lawyer representing Steward Health Care said in court Friday morning, about 20 minutes before the governor's office made its announcement, that the company is "close" to signing purchase agreements for at least five of its six for-sale hospital campuses in Massachusetts.

More 'Forgetting people like me': Patients of Nashoba Hospital fearful over Steward Health Care shut down

"I'm pleased to report we've made very significant progress with the parties, in no small part to the efforts of the mediator," Ray Schrock, Steward’s lawyer from the firm Weil, Gotshal & Manges, said Friday. "We're not quite there yet but we are hopeful that we could close out the remaining issues between, on the one hand the buyers, on the second between the commonwealth of Massachusetts and our stakeholders, as we move forward toward what we hope is a signing of asset purchase agreements on hopefully all of the six hospitals that we're trying to sell. But certainly at least on five, I know we're very, very close."

Steward hopes to be "reporting a favorable result on signing the asset purchase agreements for Massachusetts on Monday," Schrock said.

Steward officials previously told the court that they received binding bids from local operators to acquire six of their Massachusetts hospitals — St. Elizabeth’s Medical Center, St. Anne’s Hospital, Good Samaritan Medical Center, Holy Family Hospital – Haverhill, Holy Family Hospital – Methuen, and Morton Hospital. Last week, some doubt emerged around whether the Haverhill campus of Holy Family was included in the bid for that license, raising the possibility that hospitals beyond Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer could close here.

Schrock said that the outstanding issue related to the sixth hospital was under discussion between the mortgage lender for Steward's landlord and Massachusetts state government. On Thursday, Healey called out the lender, Apollo Global Management, and said she has been "very aggressive" about pushing Apollo to sign off on a deal.

"So my hope is that they come to their senses and finalize this so that we can proceed with saving these six campuses," Healey said.

Steward is planning to layoff 753 workers at Carney Hospital and 490 at Nashoba Valley Medical Center on Aug. 31. Healey emphasized her interest in ensuring Steward employees at Carney and Nashoba get severance pay. She also said officials are helping to connect the workers with other jobs.

"I am calling on Steward, the lenders — whoever is controlling the pot right now — to make sure that they pay the severances of health care workers and staff who are going to lose jobs at the facilities that are closing. That has to happen, OK?" Healey said.

Healey's office later said the Office of Labor and Workforce Development has been meeting with Steward employees on-site at Carney and Nashoba. Within the next two weeks, MassHire Rapid Response, which supports businesses dealing with layoffs, will hold job fairs at Carney and Nashoba featuring more than 40 health care employers.

The Healey administration said it has helped more than 450 Steward employees so far, including by providing job services and connecting them with employment opportunities.

State House News Service reporter Alison Kuznitz contributed to this story.

More With Ayer hospital slated to close, Steward CEO explains his vacation at Olympics

This article originally appeared on Telegram & Gazette: Deals, buyers outlined for five Steward hospitals