In a critical turn of events, the financial instability of Steward Health Care, a conglomerate overseeing nine Massachusetts hospitals, has prompted widespread concerns. While viewed as a crisis, health policy expert John McDonough suggests that this predicament could serve as an opportunity to fortify the state’s healthcare system, rendering it more resilient, patient-centered, and community-focused.
Media reports unveil a disconcerting scenario within some Steward facilities, with inadequate staffing and supplies in recent months posing potential threats to patient well-being. The specter of hospital closures amplifies the alarm, risking the deprivation of vital healthcare services in affected communities and placing an added burden on other hospitals throughout the state.
Discussing the situation on the February 26 episode of “The Codcast,” a podcast produced by CommonWealth Beacon, McDonough, along with Paul Hattis of the Lown Institute, explored the challenges facing Steward Health Care and proposed avenues for improvement. Both experts, who have co-authored articles on the matter, delved into the root causes of Steward’s financial troubles and potential strategies for resolution.
Established in 2010 as a for-profit healthcare system, Steward emerged from the acquisition of the struggling Caritas Christi hospital chain by the private equity firm Cerberus Capital Management. Subsequent financial struggles led to the sale of its Massachusetts properties in 2016 to Medical Properties Trust (MPT) for $1.25 billion, with Steward leasing these properties back. Rather than reinvesting in its hospitals, McDonough asserts that Steward utilized the proceeds to expand its reach beyond Massachusetts, exacerbating its financial challenges.
The burdensome lease payments to MPT, coupled with a substantial decline in surgical procedures during the COVID-19 pandemic, have contributed to Steward’s ongoing financial difficulties. McDonough highlights the company’s avoidance of submitting required financial information to the state in recent years as an additional concern.
Compounding the situation, reports in the Boston Globe reveal that Steward CEO Ralph de la Torre has profited from the company’s financial dealings, affording him ownership of two yachts and two private jets—an ethically contentious move, according to McDonough.
Advocating for increased oversight, McDonough urges Massachusetts leaders to scrutinize Steward’s operations closely. He recommends exploring avenues for Steward to exit the state, with the potential for non-profit community hospitals to assume responsibility for some of Steward’s struggling facilities. The overarching objective, McDonough emphasizes, is to prioritize public health advancement over profit-driven motives.
