This audio is automatically generated. Please let us know if you have any feedback.
Diving certificate:
- Steward is in the process of closing two hospitals in Ohio and another in Pennsylvania is on the verge of closing as the health system continues to struggle through bankruptcy.
- The closures of Trumbull Regional Medical Center and Hillside Rehabilitation Hospital, both in Warren, Ohio, came after Steward was unable to find a buyer for the facilities. The hospitals will close on or about Sept. 20, according to the system.
- Meanwhile, Sharon Regional Medical Center in Sharon, Pennsylvania, which is suffering from a severe capital shortage, could soon close without a buyer, according to court documents.
Diving insight:
Steward’s financial distress has now reached hospitals in Ohio and Pennsylvania.
The Dallas-based system filed for bankruptcy in May after accumulating $9 billion in debt. Since then, Steward has been trying to sell as many assets as possible, including its 31 hospitals in 8 states and a large physician group, Stewardship Health.
In Ohio, “despite our best efforts to find qualified buyers, no reasonable offers have been received for these hospitals. Due to our significant cash constraints, we now find ourselves in the unfortunate but unavoidable situation of having to initiate the process of closing the facilities,” a Steward spokesperson said in a statement.
State and federal lawmakers have blamed Steward’s precarious financial situation on the profiteering of the system’s leadership, particularly CEO Ralph de la Torre. De la Torre was even subpoenaed to testify before the Senate about his role in Steward’s financial collapse.
“The closure of Hillside is a tragic result of greed-driven hospital executives backed by private equity prioritizing their yachts and private jets over patient care,” Rick Lucas, president and CEO of the Ohio Nurses Association, said in a statement. “This decision leaves our community without critical rehabilitation services and forces our dedicated team of nurses and health care professionals into unemployment due to Steward’s unbridled greed.”
ONA represents medical staff at Hillside, 170 of whom will be affected by the closure, according to a layoff notice filed in Ohio. In Trumbull, 765 employees will lose their jobs when the hospital closes.
Sharon Regional, a 163-bed acute care hospital, could soon share the fate of those facilities. Steward has asked the state for $1.5 million by Friday to keep the “severely neglected” Sharon Regional open, according to a filing by the state’s attorney general in bankruptcy court.
Pennsylvania is reviewing Steward’s request but needs more detailed financial information and more time to consider the request, Attorney General Michelle Henry said.
On Thursday, a judge ordered Steward to delay closing the facility until after the end of this month, while also ordering the system to work with the state and potential buyers to find a solution that would keep Sharon’s doors open, Reuters reports. Pennsylvania has found a potential buyer: Meadville Medical Center.
Steward has struggled to sell its assets, publicly losing buyers and delaying the sale timeline several times. Negotiations are complex because Steward does not own the land on which its hospitals operate and various lenders are vying for their share of the proceeds.
Earlier this week, Steward filed a lawsuit against the hospital’s landlord, Medical Properties Trust, alleging that it had obstructed plans to sell its hospitals. Among other things, the company had spoken directly to potential bidders without the system’s consent.
In a bankruptcy hearing earlier this month, Steward said it was in the process of finalizing purchase agreements for its hospitals in Louisiana and Arkansas and had received offers for some facilities in Pennsylvania and Ohio. Last week, Orlando Health offered more than $439 million for Steward’s hospitals in Florida, according to court documents, even though Steward’s landlord, Medical Properties Trust, objected to the sale.
In Massachusetts, the state negotiated a deal earlier this week to keep five of Steward’s hospitals open despite bankruptcy by transferring them to new owners. Steward has already announced the impending closure of two other hospitals in the state, while another Steward facility, Norwood Hospital, remains closed following severe flooding in 2020.
And earlier this month, Steward signed a deal to sell its physician network to a private equity firm for $245 million.
