'Enough is Enough': Massachusetts Makes Deals for Steward Hospitals

Governor Maura Healey's office will facilitate the transition of the hospitals to new ownership to ensure they remain open.

As Steward Health Care continues to navigate bankruptcy, the embattled health system's presence in Massachusetts finally appears at an end.

Governor Maura Healey announced that the state has reached deals in principle for four Steward hospitals and is wrestling away control of another to transfer the facilities to new owners, allowing them to stay open.

If the transactions are completed, Holy Family Hospitals in Haverhill and Methuen will be operated by Lawrence General Hospital, while Morton Hospital and Saint Anne's will go to Lifespan, and Good Samaritan Medical Center will go to Boston Medical Center.

After the state seizes control of Saint Elizabeth's through eminent domain, the hospital will eventually be operated by Boston Medical Center as well.

"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 hard-working women and men who work at those hospitals," Healey said in a statement. "Our team under Secretary Kate Walsh worked day in and day out to secure new, responsible, qualified operators who will protect and improve care for their communities. We're grateful for the close collaboration of the Legislature to develop a fiscally responsible financing plan to support these transitions." 

In announcing the decision to seize control of Saint Elizabeth's, Healey accused Steward landlord Macquarie Investment Partners and lender Apollo Global Management of putting their own interests above those of the people of Massachusetts.

"Enough is enough," Healey said.

The state's deals, however, will not affect Carney or Nashoba Valley hospitals, which are on track to close after not receiving qualified bids. In the meantime, the administration said it has committed $30 million to keep the hospitals open through the end of the month and is "focused on supporting workers and connecting them to new jobs while also safely transitioning care."

Steward's problems in Massachusetts may be resolved soon, but the company still has divestures to see through elsewhere.

In May, Steward filed for bankruptcy before putting all 31 of its hospitals up for sale as it faced $9 billion in total liabilities.

Much of the focus has been on the sale of Steward's physician group, Stewardship Health, which was initially being scooped up by UnitedHealth Group's Optum until the deal fell apart. Earlier this month, Stewardship was bought for $245 million by a private equity firm.

Steward has struggled to nail down buyers and lock in deals due to the interests of its landlords and lenders.

This week, the health system filed a lawsuit against Medical Properties Trust for interfering in its sales by working with potential buyers without Steward's consent.