Tentative deals have been reached to transfer ownership of four Steward’s Health Care hospitals in the state, Gov. Maura Healey said Friday, announcing that the state plans to take over a fifth hospital to prevent it from shutting down.
The plan, which is subject to approval by a U.S. Bankruptcy judge in Texas, calls for Lawrence General Hospital to take over Holy Family’s hospital campuses in Methuen and Haverhill, which together count as one hospital under the agreement. Another health care group, Lifespan, would take over Morton and Saint Anne’s hospitals, and Boston Medical Center would take over Good Samaritan Hospital.
The state will take over Saint Elizabeth’s Medical Center in Boston by eminent domain, Healey said, with plans to eventually transfer ownership of the facility to Boston Medical Center.
“Today, we are taking steps to save and keep operating the five remaining Steward Hospitals, protecting access to care in those communities and preserving the jobs of the hardworking women and men who work at those hospitals,” Healey told reporters at a briefing.
Healey didn’t disclose other details of the sale plans for the four hospitals, which are still under negotiation, but said the plans to make an “fair market” offer of $4.5 million for the Saint Elizabeth Hospital facility.
The governor said her administration is still working on a funding source, and legislative leaders have agreed to develop a “fiscally responsible financing plan that includes cash advances, capital support and maximizing federal matches” to support the transition of the hospital to the new owners.
“We are excited about the opportunity that puts quality and safety at the forefront of everything we do and is guided by the principle of caring for our community,” Dr. Abha Agrawal, president and CEO of Lawrence General, said in a statement.
“We are grateful to the many stakeholders who have helped in this process, including our federal and state legislative delegations, local officials, and the unions who represent employees at Holy Family Hospital,” the statement continues.
The announcement comes on the same day company representatives were scheduled to appear before a federal bankruptcy judge in Texas to get approval to sell its hospitals in Massachusetts, Arkansas, Louisiana, Ohio and Pennsylvania to pay off creditors.
Steward’s lawyers postponed that meeting until Tuesday, without citing a reason. It was the second time the company delayed its hearing.
A request for comment from a Steward spokesperson wasn’t answered Friday.
Healey said her administration decided to take over St. Elizabeth because the landlord was unwilling to agree to a “highly qualified bid from an excellent hospital operator.”
“This will ensure that the hospital continues to stay open and operating in that community,” she said.
Steward plans to put its 31 U.S. hospitals up for sale to pay down $9 billion in outstanding liabilities owed to creditors. The company filed for federal bankruptcy protections in May.
Steward has told the bankruptcy court that received bids for its Massachusetts hospitals but has yet to identify bidders or disclose the sale prices.
The company plans to close its hospitals in Dorchester and Ayer after failing to reach adequate terms with prospective buyers. Healey said Friday’s announcement won’t impact the pending closure of those two facilities by the end of the month.
“The news today is good, but for everyone,” Healey said. “The community, patients, workers at Carney Hospital and Nashoba Valley Medical Center are rightly upset about these closures. and I want them to know that I am, too.”
Healey had been urged by some groups to take over all of Steward’s hospitals by eminent domain by declaring a public health emergency, similar to the one in place during the COVID-19 pandemic. Healey had expressed concerns about the logistical and financial challenges of the state taking over a hospital system.
Union leaders representing health care workers employed by the hospitals praised the move, saying it will save jobs and improve working conditions.
“Steward’s hospitals are essential to Massachusetts’ healthcare system, and this bold step will keep them open to serve our patients despite the outrageous financial brinksmanship of Apollo Global Management, Medical Properties Trust, and Steward Health Care,” Tim Foley, 1199 SEIU’s executive vice president.
Steward’s management cited an increase in operating costs and insufficient federal government-program reimbursem*nt among the factors leading to the Chapter 11 bankruptcy filing.
But Healey and other state leaders have blamed “greed and mismanagement” by Steward’s management, including CEO Ralph de la Torre, and say the transfer of ownership from the Texas-based company will improve the state’s hospital system.
“I’m pleased to say we’re closing the book on Steward once and for all in Massachusetts. Good riddance and good luck,” Healey said Friday. “That is a good thing. and it’s not just a new chapter, but a better chapter in terms of what it will do for patient care.”
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com
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