Hospital Operator Steward Health Files for Bankruptcy

Facts

• Steward Health Care System, the largest physician-owned hospital network in the US with dozens of hospitals across eight states, filed for bankruptcy early Monday morning.¹
• The Texas-based firm, whose network includes nine hospitals in Massachusetts, is backed by private equity (PE) investors but reportedly owns creditors over $500M. However, it says that all its services are still currently up and running.²
• It further stated that it's negotiating 'initial funding of $75M and up to $225M' with its landlord, Medical Properties Trust. The bankruptcy will affect tens of thousands of employees, including 16K in Massachusetts alone.³
• In Massachusetts, the Department of Public Health (DPH) has since January been monitoring that Steward sites have enough supplies and staff. DPH has now set up an 'Emergency Operation Plan' to 'protect access to care and preserve jobs.'⁴
• The company began buying hospitals in 2010 with hundreds of millions of dollars from PE firm Cerberus, which profited $800M before selling its stake in 2021. It has reportedly sold off over $1B in land to Medical Properties Trust since 2016.²

Sources: ¹NBC Boston, ²CBS, ³wbur.org and ⁴Boston Herald.

Narratives

• Establishment-critical narrative, as provided by Ars Technica. Not only do PE firms sink hospitals into bankruptcy once their investment is over, they destroy patient care while they own them. A recent report found that rates of medical errors increase within a few years of the initial investment, while another found that some of the 220 owned by PE firm Apollo were ranked as the worst in their states. These companies buy up healthcare facilities with no care for the patients inside them.
• Pro-establishment narrative, as provided by American Investment Council. While some may claim the opposite, PE firms are actually saving both American hospitals and lives, having an especially positive effect on mortality rates. This is likely because the proportion of physicians, nurses, and pharmacists at PE-owned hospitals is greater than others. News of a struggling hospital is always tragic, but that doesn't mean we should paint the entire industry in a negative light.