Steward Healthcare, the largest private hospital system in Massachusetts, is facing a financial crisis that could force some of its hospitals to close or significantly curtail services, putting patient care across Eastern Massachusetts in jeopardy.
Financial Losses and Lawsuits Threaten Viability of Steward System
Steward has lost over $300 million in the last two fiscal years and reportedly owes vendors nearly $150 million, including $50 million just in unpaid rent, according to recent media reports. The company has hired restructuring advisers to explore options as its finances deteriorate. Multiple lawsuits have also been filed against Steward this month related to unpaid bills.
The dire financial situation raises doubts about Steward’s ability to keep all 11 of its Massachusetts hospitals open. In a January 19 letter, Steward CEO Ralph de la Torre warned that “severe financial losses may soon force Steward to curtail services or close hospitals unless quick action is taken.” The hospitals potentially at risk include several south of Boston such as Good Samaritan Medical Center in Brockton, Morton Hospital in Taunton, and St. Anne’s Hospital in Fall River.
| Hospital | Location | Beds |
|---|---|---|
| Good Samaritan Medical Center | Brockton | 318 |
| Morton Hospital | Taunton | 129 |
| St. Anne’s Hospital | Fall River | 162 |
De la Torre has appealed to state leaders for over $200 million in financial assistance to ensure continued operations. However, even if aid is approved, analysts say years of deficits and growing liabilities mean additional changes to Steward’s business model could still be needed long-term.
Patients Voice Concern Over Potential Disruption to Care
The prospect of hospital closures or service reductions has raised alarm among patients who rely on Steward facilities for care.
“This is scary. These hospitals can’t close,” said Brockton resident Samantha Sousa, whose physicians practice at Good Samaritan Medical Center. Like many in the community, her family has utilized Good Samaritan for generations when needing emergency care or surgeries.
Other patients emphasized Steward provides vital healthcare access in smaller cities south of Boston that have lost hospitals before. “We need Good Sam here for the people…It’s too important,” added James Dean, another Brockton patient.
Union Leaders: “All Options On Table” to Save Hospitals
Labor unions representing over 6,000 Steward employees in Massachusetts have also voiced urgent concern, both over potential job loss and safeguarding healthcare infrastructure for the public.
“We will pursue all options to find solutions to save our hospitals from closure,” warned Tom Juravich, President of UFCW Local 1445, with members at multiple Steward sites. He said the union is communicating with elected leaders and as assessing legal strategies. The 1199SEIU United Healthcare Workers East union is similarly pressuring state officials for answers on how Steward’s financial deterioration occurred and options to bolster the hospital chain’s finances.
Government Officials Under Pressure to Intervene
The deepening crisis at Steward has captured the attention of government officials now facing public calls to prevent catastrophic disruption to patient care.
Congresswoman Ayanna Pressley asserted, “We cannot allow vulnerable communities [that Steward serves] to suffer the loss of healthcare services during a pandemic.” She organized an emergency meeting with other members of the Massachusetts congressional delegation and Steward executives this week to discuss solutions. Additional state legislative hearings are expected soon as well.
Governor Maura Healey has said her administration is “closely monitoring the evolving situation” and is in contact with Steward while evaluating how to maintain access to care. Healey has stopped short of pledging any specific aid package yet.
Meanwhile, Attorney General Andrea Campbell has received a petition requesting her office conduct an urgent investigation of Steward’s finances and operations to determine the causes of the rapid financial decline. Previous private equity investments in Steward have faced criticism for saddling the hospital network with unsustainable amounts of debt. How the Attorney General proceeds could impact what options are available to policymakers in addressing the Steward emergency.
What Comes Next: All Scenarios On the Table to Avoid Shutdowns
With pressure on government leaders ramping up, difficult decisions around Steward are expected in the coming weeks. The company says that despite executing every other cost savings measure possible already, definitive state budget assistance is still required no later than April to keep all hospitals open.
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If substantial enough state funds are approved quickly, closures may be narrowly avoided in the near term. But major changes to Steward’s long-term business model could still be forthcoming to address root causes of unprofitability.
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If state leaders reject financial aid, Steward could move to begin shutting down hospitals deemed most distressed as soon as March. Leaders warn Good Samaritan Medical Center and Morton Hospital are at greatest risk for initial closure.
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Another path could involve the state intervening to force a sale or reorganization of Steward through the regulatory process. But the complexity of safely transitioning control of such a large hospital network means closures likely cannot be completely ruled out.
Ultimately patients, staff, state regulators and investors are all carefully watching whether a formidable rescue plan can come together fast enough. If not, Steward’s spiral threatens to significantly reduce healthcare access from Brockton and Taunton to Fall River and beyond. For now concerned residents can only watch anxiously and prepare contingency plans as long as the threat of hospital closures persists.
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