The office of the Massachusetts Attorney General says it will investigate the closure of a 196-bed acute care hospital owned by Steward "in the context of [its] legal obligations."
Three years after Steward Health Care System bought the bankrupt Quincy Medical Center and agreed to keep it open for 10 years, the for-profit health system has announced that it will shutter the 196-bed hospital on Dec. 31.
The announcement by Steward last Thursday prompted Massachusetts Attorney General Martha Coakley to announce that her office will investigate the closure, which would leave the city of 93,000 people just south of Boston without an acute care hospital.
"We have just been notified about this decision and are currently reviewing it in the context of Steward's legal obligations," Coakley said in a brief media statement.
Steward's purchase of QMC in September 2011 was approved by Coakley's office but came with many strings attached. At the time, her office said in a media release that: "The Attorney General's approval of the Quincy Medical Center transaction will ensure that the hospital emerges from bankruptcy in the best position to provide Quincy's 92,000 residents with access to a full service acute care hospital and maintain key jobs…"
A key stipulation was that Steward would "maintain an acute care hospital in Quincy that provides at least the same scope of services during a 10-Year No Close period." Steward also agreed to maintain 22 inpatient geriatric psychiatric beds at QMC, along with significant capital upgrades.
In addition to the AG's agreement, a separate Massachusetts state law requires hospitals that are closing to provide a 90-day notice window and to submit to a public hearing, neither of which Steward appears to be doing with QMC.
In a lengthy media release posted on its QMC website, Steward Hospitals President Mark Girard, MD, did not address the apparent discrepancies with the AG's agreement from 2011. Calls to Steward for comment Friday were not returned.
Girard blamed the closure on low volumes, declining reimbursements from Medicare, and underfunding from Medicaid. He noted that in the past 20 years QMC has needed more than $100 million in city and state bailouts before falling into bankruptcy.
He also said that Steward has dropped an additional $100 million into the hospital since its purchase in 2011, but that the hospital continues to lose about $20 million a year.
"On an average day, only one-fifth of all beds are occupied and it has become abundantly clear that local residents no longer seek inpatient services from Quincy Medical Center," Girard said.
Steward said the closure shouldn't greatly affect patient access because there are 15 acute care hospitals located within 10 miles of QMC in the hospital-saturated Boston area. There are also 12 surgery centers, 21 urgent care centers, more than 150 nursing homes, 130 outpatient behavioral health sites, and more than 500 physicians within that radius, Steward says.
Instead of an acute care hospital, the shuttered QMC will be replaced "with a more sustainable healthcare system to meet the community's needs," Steward said. That network will include:
- 24-hour emergency room access
- Separately sited, urgent care centers
- A multi-specialty clinic in Quincy
- Radiological services including X-Ray, mammography, CT, and ultrasound
- Steward PCPs and specialist physicians in Quincy
- Continued access to 15 hospitals within 10 miles of QMC, including a Steward hospital four miles away
- Transportation links to other community health access points
Adam Powell, a healthcare economist and president of Boston-based Payer+Provider consultants, says Steward knew it was gambling when it purchased several financially struggling not-for-profit hospitals in eastern Massachusetts, "but as a result of that, they have a substantial network that was built quickly in this market."
"What Steward has learned over the past several years is that there has not been substantial demand for commercial inpatient services at QMC," Powell says. "QMC is roughly a half-hour drive from the more-famous hospitals in downtown Boston and as a result the patients who have the finances and the transportation have elective inpatient procedures performed downtown or at competing institutions."
"As a result, says Powell, "QMC has been left mostly with outpatient procedures and inpatient procedures performed on Medicare and Medicaid patients. It's been a tough financial slog for Steward and 2014 was looking worse than 2013."
Volumes are down because the region is over-bedded, Powell says. "That was the problem to begin with. The government poured money into it and then Steward poured money into it," he says. "First you think maybe more money or different management would solve the problem, but it appears that neither has solved the problem. The problem may be that there is no need."
In the meantime, Massachusetts Nurses Association spokesman David Schildmeier says the union is "working closely" with Steward to find jobs for the more than 200 registered nurses who will be displaced by the closure.
"Steward has frozen all open positions throughout the 10 remaining hospitals in Massachusetts," Schildmeier says. "We are hoping the 221 nurses we represent get preference on positions that are open so that they don't lose employment and they get all the benefits and pay that under the law they are owed."
The hospital employs 680 people, all of whom will be paid for the next 60 days, Steward said.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.