Healey Tells Steward Health Care "You're on your own". (Boston: sale, real estate)

[BugsyPal]

For profit Steward Health Care is bleeding red ink and may be near financial collapse.

Healey's response pretty much amounts to "poor you".

https://www.wbur.org/news/2024/01/26...-woes-continue

[OutdoorLover]

They don't sound like they are well led. Not only are they verging on bankruptcy, but: "Steward is a rarity in Massachusetts, where most hospitals are structured as nonprofits, and it operates in relative secrecy. It does not file detailed financial information with state officials — as required of all hospital systems — and is in litigation to avoid disclosing the documents.

David Seltz, executive director of the Health Policy Commission, a state watchdog agency, told hospital leaders Friday that Steward executives are flouting the law."

[P Larsen]

Steward has been a variation in the hospital industry on classic vulture capital schemes: fat cats got fatter on the carcass of the Caritas hospital system, and the last act is to try to socialize the losses.

[robr2]

Originally Posted by OutdoorLover

They don't sound like they are well led. Not only are they verging on bankruptcy, but: "Steward is a rarity in Massachusetts, where most hospitals are structured as nonprofits, and it operates in relative secrecy. It does not file detailed financial information with state officials — as required of all hospital systems — and is in litigation to avoid disclosing the documents.

David Seltz, executive director of the Health Policy Commission, a state watchdog agency, told hospital leaders Friday that Steward executives are flouting the law."

As I noted in the medical thread, Cerebus (an investment fund operator) bought Caritas in 2010, changed the name, and then turned it into a for profit venture. Over the years Cerebus sold off the underlying property to Medical Properties Trust and Steward pays them rent. In 2020, Steward paid Cerebus $1 billion for it's investment and became privately held. Note that Steward is a national hospital operator.

Basically, an investment fund walked about with an 400% return in 10 years by selling off the real value of the investment and then walks away.

[bostongymjunkie]

They kinda should be on their own. But I'm open to listening to reasonable, logical and practical arguments as to why they shouldn't be.

[BugsyPal]

Originally Posted by robr2

As I noted in the medical thread, Cerebus (an investment fund operator) bought Caritas in 2010, changed the name, and then turned it into a for profit venture. Over the years Cerebus sold off the underlying property to Medical Properties Trust and Steward pays them rent. In 2020, Steward paid Cerebus $1 billion for it's investment and became privately held. Note that Steward is a national hospital operator.

Basically, an investment fund walked about with an 400% return in 10 years by selling off the real value of the investment and then walks away.

That is the usual MO for venture capitalists/private equity. Just ask Mittens Romney....

Carl Icahn and his lot have made fortunes raping and looting American companies leaving rotting picked over corpses in their wake.

Things usually go along lines of find a company, raid it's assets, load it up with debt (which is primary so venture capitalists' get theirs first), then just sit and wait...

Health care and assisted living are two big areas for this lot, and we all are going to pay one way or another.

https://www.washingtonpost.com/busin...y-real-estate/

[robr2]

Originally Posted by bostongymjunkie

They kinda should be on their own. But I'm open to listening to reasonable, logical and practical arguments as to why they shouldn't be.

These hospitals provide vital services to their local communities. Whenever a hospital is closed, there is much outcry from the community. These local community hospitals take the pressure off the teaching hospitals in Boston.

Steward has said they want to sell or close four hospitals (total 5 campuses) immediately:

Norwood (currently under re-construction)
Nashoba Valley - Ayer
St. Elizabeth's - Brighton
Holy Family Hospital - Haverhill and Methuen.

The closed Norwood has put pressure on South Shore and Newton Wellesley.

Closing Nashoba Valley affects UMass in Leominster/Clinton, Southern NH in Nashua, and Emerson.

Closing St. E's affects the Boston hospitals.

Closing Holy Family affects Lawrence General, Parkland in Derry, NH, and Anna Jacques in Newburyport.

All those hospitals would immediately have to find space for new patients and figure out a way to incorporate additional staff into current infrastructure.

The quickest solution is for the state to allow MGB or BI-L to take them over. But there is a reluctance on the part of the state to allow either one to grow any bigger. The state could step in an offer debtor financing for 60 days to ensure the hospitals stay afloat and allow one or both of the big 2 to take over at the end of that time.

[bostongymjunkie]

Originally Posted by robr2

These hospitals provide vital services to their local communities. Whenever a hospital is closed, there is much outcry from the community. These local community hospitals take the pressure off the teaching hospitals in Boston.

Steward has said they want to sell or close four hospitals (total 5 campuses) immediately:

Norwood (currently under re-construction)
Nashoba Valley - Ayer
St. Elizabeth's - Brighton
Holy Family Hospital - Haverhill and Methuen.

The closed Norwood has put pressure on South Shore and Newton Wellesley.

Closing Nashoba Valley affects UMass in Leominster/Clinton, Southern NH in Nashua, and Emerson.

Closing St. E's affects the Boston hospitals.

Closing Holy Family affects Lawrence General, Parkland in Derry, NH, and Anna Jacques in Newburyport.

All those hospitals would immediately have to find space for new patients and figure out a way to incorporate additional staff into current infrastructure.

The quickest solution is for the state to allow MGB or BI-L to take them over. But there is a reluctance on the part of the state to allow either one to grow any bigger. The state could step in an offer debtor financing for 60 days to ensure the hospitals stay afloat and allow one or both of the big 2 to take over at the end of that time.

I fully grasp its place in the system and the ripple effects to the community, but it's a private for-profit company that has been flouting state finance reporting regulations, and they have not submitted any plan. The state certainly has a role in facilitating contingencies and perhaps helping to broker discussions among the healthcare community's leadership perhaps leading to sale and/or merger. But the problems faced by this private for-profit company are its own and the state should not be in a position of bailing it out in any fashion.

[BugsyPal]

Originally Posted by robr2

These hospitals provide vital services to their local communities. Whenever a hospital is closed, there is much outcry from the community. These local community hospitals take the pressure off the teaching hospitals in Boston.

Steward has said they want to sell or close four hospitals (total 5 campuses) immediately:

Norwood (currently under re-construction)
Nashoba Valley - Ayer
St. Elizabeth's - Brighton
Holy Family Hospital - Haverhill and Methuen.

The closed Norwood has put pressure on South Shore and Newton Wellesley.

Closing Nashoba Valley affects UMass in Leominster/Clinton, Southern NH in Nashua, and Emerson.

Closing St. E's affects the Boston hospitals.

Closing Holy Family affects Lawrence General, Parkland in Derry, NH, and Anna Jacques in Newburyport.

All those hospitals would immediately have to find space for new patients and figure out a way to incorporate additional staff into current infrastructure.

The quickest solution is for the state to allow MGB or BI-L to take them over. But there is a reluctance on the part of the state to allow either one to grow any bigger. The state could step in an offer debtor financing for 60 days to ensure the hospitals stay afloat and allow one or both of the big 2 to take over at the end of that time.

OTOH giving succor to Steward rewards possible bad behaviour. It also reinforces idea that private enterprises can have government by short and curlies. That is them what they want or all sorts of bad things will happen.

Private equity/venture capital plays this sort of game all the time.

[BugsyPal]

Originally Posted by bostongymjunkie

I fully grasp its place in the system and the ripple effects to the community, but it's a private for-profit company that has been flouting state finance reporting regulations, and they have not submitted any plan. The state certainly has a role in facilitating contingencies and perhaps helping to broker discussions among the healthcare community's leadership perhaps leading to sale and/or merger. But the problems faced by this private for-profit company are its own and the state should not be in a position of bailing it out in any fashion.

Those "ripple effects" have already begun.

https://www.nbcboston.com/news/local...rmoil/3260471/

https://whav.net/2024/01/19/holy-fam...ncial-reports/

From second linked article:

"Medical Properties Trust spent $1.25 billion in 2016 to buy Steward’s real estate “through a real estate sale-leaseback transaction and acquisition of a limited equity stake in the company. The $1.25 billion total value of the transaction includes a $1.2 billion investment in hospital real estate and a $50 million equity investment in Steward,” according to a company press release. At the time, the real estate firm said the money would allow the then-Boston-based Steward to “to expand nationally.”

As noted in previous post this is what venture (ok, vulture) capital and private equity do and are doing it quite often now with healthcare, assisted living, rehab and nursing homes.

With corporations it's assets and or cash they want. For healthcare it's the main and often most valuable asset they have; real estate.

Increasingly across USA landscape is littered with hospitals or other healthcare corpses that were left after private equity was done with them. Hahnemann hospital in PA is but one example. https://en.wikipedia.org/wiki/Hahnem...rsity_Hospital

On other side of things you have to spend money to run any sort of healthcare. Preferred MO for private equity is to hold labor costs down by squeezing out as much productivity per worker and keeping head counts down. That is causing problems at least for two of Steward's hospitals. https://www.prnewswire.com/news-rele...301960164.html