Steward Health Care Files for Chapter 11 Bankruptcy Amid Financial Challenges

Steward Health Care, the largest private physician-owned for-profit healthcare network in the U.S., has filed for Chapter 11 bankruptcy in Texas, sparking concerns about the future of its 31 hospitals in eight states. The company, which recently closed a hospital in Massachusetts, has faced criticism from state officials over its financial decisions and ownership structure.

Democratic Massachusetts Attorney General Andrea Joy Campbell has raised questions about whether Steward’s pursuit of profits may have compromised patient care, while Governor Maura Healey has vowed to ensure that the company’s financial troubles do not impact medical services in the state. Steward is seeking up to $300 million in financing from its landlord, Medical Properties Trust, to keep its hospitals operational during the bankruptcy process.

The bankruptcy filing comes amid a wave of similar cases involving private equity-backed medical companies, prompting U.S. Senator Elizabeth Warren to criticize Steward’s former owner, Cerberus Capital Management, for its role in the company’s financial struggles. Cerberus has defended its ownership, stating that the real estate sale that led to Steward’s rent obligations helped fund expansions and improvements in medical care.

With nearly 30,000 employees and over two million patients annually, Steward Health Care’s bankruptcy will have far-reaching implications for the healthcare industry. The company’s CEO, Ralph de la Torre, expressed confidence that the financing from Medical Properties Trust will allow Steward to continue providing care to its patients and supporting its employees during this challenging time.