Steward crisis reflects broken healthcare system

Following a Boston Globe report indicating that Steward Health Care System (Steward) is in dire financial condition, U.S. Senator Elizabeth Warren among others pressed Steward to brief them on Steward’s financial position, the status of their Massachusetts facilities, and their plans to ensure the communities they serve are not abandoned. Their letter to Steward highlighted the urgency of the situation, demanding transparency about the financial strategies the healthcare provider intends to employ to navigate through its financial turmoil. The legislators sought insight from Steward, aiming to ascertain how the healthcare system plans to sustain operations at its facilities, ensuring that the healthcare needs of the communities remain uninterrupted.

Steward operates nine hospitals in Massachusetts and two dozen hospitals in other states. While the fate of these nine hospitals in the state of Massachusetts remains in doubt, lawmakers and others are discussing what, or who, is to blame for the current state of the system. Many believe the prime issue is the role of for-profit companies, like Steward, in the healthcare industry. 

According to U.S. Rep. Stephen Lynch, Steward executives told staff the situation is “urgent” at four of the company’s hospitals: Norwood Hospital, Holy Family Hospital in Haverhill and Methuen, St. Elizabeth’s in Brighton, and Nashoba Valley Medical Center in Ayer. 

Steward’s financial situation is dismal, owing money to staffing agencies and Medical Properties Trust, leaving employees to pay for products themselves for patients.

“For months, the janitorial service, those folks, were buying toilet paper for patients with their own money. This is an unbelievable situation we find ourselves in. I think we are, perhaps, the victims of a Ponzi scheme,” Haverhill Mayor Melinda Barrett said. 

In addition to the loss patients will feel if area hospitals close, there will also be significant regional layoff-risk or job insecurity to the 16,000 employees in the state. 

“Families who receive care at Holy Family Hospital and Nashoba Valley Medical Center – both owned by Steward – were recently notified that their care is now in jeopardy because of the corporation’s gross financial negligence that’s seeing the company try to shutter 4 of the 9 hospitals they own in Massachusetts,” shared Rep. Lori Trahan who brought the Steward Health Care System crisis to attention in a Congressional committee.

While Steward pointed to Medicare and other issues, Trahan believes the real cause of the issue is unpaid rent.

“For their reasoning, Steward executives have pointed to, you guessed it, low Medicaid reimbursement rate as the cause of their financial distress. But earlier this month, it was revealed that the company has missed rent payments to an ‘outside landlord’ that actually owns the property and buildings their facilities operate in,” said Trahan.

A bill has been filed which could block hospitals from closing for approximately three years to preserve access and health status in the hospital’s service area.

We need to question why things got to this point and what needs to be done to prevent this from further impacting Americans and their access to healthcare in the future.

“The situation at Steward Health is precisely why Americans need to demand strong anti-profiteering laws in our healthcare system. Currently, our laws don’t prevent private investors from buying up hospitals and then draining them of all their value, leaving patients with no place to get quality care. We still don’t have full transparency into exactly why Steward hasn’t been paying their bills – but we do know their CEO bought a $40M yacht last year and paid himself a nine figure dividend,” shares DoorSpace CEO Sarah M. Worthy. 

This is not an isolated problem, and is indicative of a broken system.

“The story at Steward is just one of many we’re finally hearing about where private equity and greedy executives are decimating hospitals while enriching themselves. It’s time we made it illegal for these executives to buy yachts while patients take out mortgages to pay for their treatments.”