May 6, 2024 - News

What's next after Steward Health Care's bankruptcy filing

The exterior and entrance sign of Carney Hospital in Dorchester. It's one of eight hospitals owned by Steward in Massachusetts.

Carney Hospital in Dorchester. Photo: Maddie Meyer/Getty Images

Steward Health Care's eight functioning hospitals in Massachusetts will remain open while the beleaguered company undergoes Chapter 11 bankruptcy proceedings.

Why it matters: The hospital system's move — one of the biggest hospital bankruptcies in decades — raised concerns about the fate of its 16,000 Massachusetts employees and the patients they serve, but state officials tried to dispel those fears yesterday.

State of play: Dallas-based Steward, which filed for bankruptcy protection early Monday, said it will move to restructure its debt under court supervision while its hospitals remain open (with the exception of Norwood Hospital, a ninth Steward hospital that closed due to flooding).

  • Steward plans to become a "debtor in possession" through an agreement it's finalizing with its landlord, Medical Properties Trust, that would provide $75 million in funding.
  • Steward could get up to $225 million more if it meets certain conditions set by MPT.

By the numbers: Steward in its bankruptcy filing estimated it has more than 100,000 creditors and liabilities between $1 billion and $10 billion, WBUR reported.

  • Steward says its assets are in the same range, per the Boston Globe.

Flashback: Steward's mounting losses and debt came to a head in January when it said it might not be able to keep its hospitals open.

  • The company's failure to pay its vendors, pay rent and share financial information prompted Massachusetts leaders to call on Steward to leave the state.

Between the lines: Gov. Maura Healey and other state officials urged the public to keep their appointments with Steward hospitals, but also noted bankruptcy is "a step toward our goal of getting Steward out of Massachusetts."

Meanwhile, Massachusetts will send representatives to court in Texas to advocate for local interests in the bankruptcy proceedings.

  • State officials created a hotline and website with information for patients, workers and family members.
  • Lora Pellegrini, president and CEO of the Massachusetts Association of Health Plans, said in a statement that its members will continue covering services provided at Steward hospitals.
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