Why Steward hospitals are a tough sell

Also: Social media is fueling a tween skin care craze [Donate ❤️]( [View in Browser](  July 16, 2024 Hi CommonHealth reader, Almost every day, it seems, we are learning more about Steward Health Care. Last week, the financially troubled, for-profit hospital company confirmed it is [under federal investigation](. Just a day later, we reported on court documents showing Steward handed [big payouts to several executives]( before filing for Chapter 11 bankruptcy this spring. More details could be coming very soon. After months of uncertainty around the future of Steward’s hospitals, the first of [a series of planned auctions this summer is finally underway](. Bids were due Monday for Steward’s seven Massachusetts hospitals, and an auction is scheduled for this coming Thursday. These sales are critical for Steward, which is billions of dollars in debt and relying on borrowed money to keep operations running. And there are big implications for patients and workers. Without new owners, Steward’s hospitals could be at risk of closure, according to bankruptcy and health care experts I spoke with. “It's important to get the hospitals sold to a new owner,” said Bradford Sandler, a bankruptcy lawyer and partner at the firm Pachulski Stang Ziehl & Jones, who is familiar with the Steward case. “It's important for patient care. It's important for communities. It's important for the employees. All the employees are living with this horrible uncertainty. “At the end of the day, bankruptcy, in a health care case, [is] about saving jobs and making sure that patient care doesn't suffer,” he said. But selling these hospitals is complicated. Steward does not own its real estate. It pays rent to a landlord. The properties are controlled by a company called Medical Properties Trust, or MPT. So anyone who wants to buy a Steward hospital also must work out a deal with MPT. In addition, we know that many Steward hospitals are losing money, and they require maintenance and repairs. That’s what concerns people like David Storto, a consultant and former Massachusetts hospital executive. “How do you make it work financially, with the degree of investment that's required?” he said. And what if no bidders step up for certain hospitals? Massachusetts officials have not detailed what they might do to help keep facilities open. ([Some have called on the state to use eminent domain]( if necessary.) “If there are no buyers, we still have to figure out a strategy to keep them open,” said state Sen. Marc Pacheco, who represents the community served by Steward’s Morton Hospital in Taunton. “It is critical care that is in the balance here.” P.S.— The CommonHealth newsletter will be off next week as our team works on some technical upgrades. We will be back in your inbox on July 30. 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