Steward Health Care Finalizes Sales of 4 Massachusetts Hosp, Negotiations Continue for 2 More

The moves are part of Steward’s Chapter 11 bankruptcy proceedings aimed at restructuring the troubled health system.

Recently, Steward Health Care announced that it has finalized agreements to sell four of its Massachusetts hospitals and is close to finalizing deals for two additional facilities. 

The moves are part of Steward’s Chapter 11 bankruptcy proceedings aimed at restructuring the troubled health system.

Steward Health Care has reached asset purchase agreements for Lifespan and Lawrence General Hospital to acquire four of its hospitals. 

Lifespan will take over Morton Hospital and Saint Anne's Hospital, while Lawrence General will acquire Holy Family Hospital - Methuen and Holy Family Hospital - Haverhill. 

“We have found partners with established track records of treating communities in the northeast United States in Lifespan, Lawrence General Hospital, and Boston Medical Center. Through these transactions, the people of the Commonwealth will continue to receive critically needed care while Steward continues to focus on its ongoing Chapter 11 process,” stated John Castellano, chief restructuring officer at Steward Health Care.

Pending Transactions

Two additional hospitals, Good Samaritan Medical Center and St Elizabeth's Medical Center, are still in the negotiation phase. While Boston Medical Center is expected to take over these facilities. 

However, the acquisition of St Elizabeth’s requires the state of Massachusetts to acquire the property through eminent domain. The building’s current landlord, a subsidiary of Apollo Global Management, has rejected the state's $4.5 million offer and may pursue legal action if an agreement cannot be reached.

“The state is 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,” said Massachusetts Governor Maura Healey. 

She further noted that her team, under Secretary Kate Walsh, worked diligently to secure new operators who would safeguard and enhance community care.

Impact on Other Facilities

The ongoing bankruptcy proceedings also involve the closure of two other Steward hospitals in Massachusetts, Carney Hospital and Nashoba Valley Hospital, as no bids were received for these facilities. 

Currently, Steward Health Care is focusing on the sale of its remaining assets, including properties in Ohio and Pennsylvania. 

Orlando Health has made a bid of $439 million for Steward’s “Space Coast” properties in Florida. These sales, along with the transfer of Steward’s physician group, Stewardship Health, to Rural Healthcare Group, are subject to approval by the bankruptcy court and regulatory bodies.

Ray Schrock, one of Steward’s attorneys, indicated that the legal team is addressing concerns from potential buyers to finalize the asset purchase agreements by the end of the weekend. He requested a status conference for Tuesday to update on any developments or challenges faced.

“We’re doing everything possible to avoid a bad outcome, to get to a good outcome over the weekend,” Schrock stated.

The sale of Stewardship Health was initially intended to be acquired by UnitedHealth Group’s Optum but was halted due to objections from lawmakers and other critics. 

Steward Health Care’s efforts to resolve its financial issues and restructure its operations continue to unfold, with significant implications for hospital operations and healthcare access in the regions affected.