Nation’s Largest Private Hospital Chain, Steward Health Care, Files for Bankruptcy in Texas
After months of uncertainty about its future, the nation’s largest private, for-profit hospital chain has filed for bankruptcy in Texas. Dallas-based Steward Health Care filed for Chapter 11 bankruptcy Monday, citing government reimbursement rates, increasing labor costs, inflation, and lingering impacts from the COVID-19 pandemic as reasons for its financial difficulties.
Steward operates more than 30 hospitals in several states, employing tens of thousands of workers, including 16,000 in Massachusetts. The company estimated its liabilities and assets to be in the range of $1 billion-$10 billion. In its bankruptcy filing, Steward revealed that it owes millions of dollars to various creditors, including staffing companies, medical device vendors, technology companies, and government agencies like the Center for Medicare and Medicaid Services and the IRS.
The bankruptcy filing has raised concerns about the future of Steward’s hospitals in Massachusetts, with state officials closely monitoring the situation. Massachusetts Gov. Maura Healey placed the blame for Steward’s bankruptcy on the company’s leadership, calling it a result of “greed, mismanagement, and lack of transparency.”
Despite the bankruptcy filing, Steward has assured that its hospitals, medical centers, and physician’s offices will remain open and continue to serve patients. The company is in negotiations with its landlord, Medical Properties Trust, for initial funding of $75 million and up to an additional $225 million to support its operations during the restructuring process.
The Massachusetts Nurses Association commended Steward workers for their dedication to serving patients through a challenging process. The union urged health care industry leaders and state officials to take immediate steps to ensure the preservation of the facilities and a safe transition to more stable ownership.
The bankruptcy process could reveal new details about Steward’s financial situation and how it became untenable. State officials have set up a command center to manage the effects of any potential loss of services or hospital closures resulting from Steward’s financial predicament. Patients, workers, and community members can access information and resources through a hotline and website set up by state officials.
The disclosure of Steward’s financial woes has sparked criticism of for-profit companies in health care and calls for greater oversight. Massachusetts lawmakers have proposed legislation to more closely regulate hospitals in the state. Despite the challenges, Steward remains committed to keeping its facilities operational and providing care to patients during the bankruptcy process.