Senators Ed Markey and Bernie Sanders are calling on federal officials to step in to make sure no patients lose access to care as the Steward Health bankruptcy crisis progresses.
“Millions rely on Steward nationwide, and its bankruptcy threatens to send shockwaves across the country,” Markey and Sanders wrote in a letter to Health and Human Services (HHS) Secretary Xavier Becerra. “HHS can be a valuable partner in mitigating the effects of Steward’s financial recklessness. If states and healthcare providers in states where patients receive Steward-affiliated care request support, we hope that HHS will urgently respond.”
Steward Health Care, a private equity company that owns eight hospitals in Massachusetts and 31 across the U.S., declared bankruptcy on May 6 after years of financial mismanagement.
Steward hospitals are expected to remain open through the process of reorganizing ownership of the facilities, Markey and Sanders wrote, but additional impacts and risks are “are possible, if not likely.”
“It is imperative that, if needed during this crisis, every federal resource, including financial support and technical assistance, be made readily available to states, providers, and patients impacted by Steward’s catastrophic financial mismanagement,” the letter stated.
Markey and Sanders did not go into further detail about what assistance may look like but provided information on the roots of the issue.
Steward and the backing private equity company Cerberus Capital Management took root in Massachusetts hospital in 2010, the senators wrote, purchasing several non-profit community hospitals. The company engage in a “predatory strategy” selling out assets including the hospitals’ property, loading them with debt and expanding through the process, they continued.
“Steward now operates 400 facility locations and 3,600 staffed beds, and employs nearly 30,000 employees, in Arizona, Arkansas, Florida, Louisiana, Massachusetts, Ohio, Pennsylvania and Texas,” the letter states. “Cerberus profited more than $800 million from the hospital system before exiting, but Steward careened under mounting financial challenges.”
The mismanagement left medical vendors unpaid, hospitals with equipment shortages and maintenance issues, cancelled and rescheduled patient appointments, and some facilities closed permanently, the senators said. Ongoing concerns, they noted, are “amply justified.”
“Steward’s implosion directly affects patients, providers, and communities,” the senators wrote, warning of the burden to patients, especially low-income patients, and surrounding hospitals dealing with the fallout. … “Any reductions to health quality or access would cause immense harm.”
