Top House Democrats Refuse to Bail Out Steward Health Care Amid Financial Challenges
House Speaker Ron Mariano and Ways and Means Chairman Rep. Aaron Michlewitz have made it clear that the Massachusetts Legislature will not provide financial support to Steward Health Care, a company facing serious financial challenges that could potentially endanger safety net hospitals in eastern Massachusetts.
Steward Health Care, which operates nine hospitals in the state and serves tens of thousands of patients, including many low-income residents with public health insurance coverage, recently secured a new funding stream to stave off hospital closures. However, top House Democrats remain skeptical of the company’s financial management and are unwilling to offer a bailout.
Mariano criticized past financing deals struck by Steward CEO Ralph de la Torre, particularly in the wake of the closure of Quincy Medical Center in 2014 due to multi-million-dollar losses. He expressed doubts about the company’s ability to sustain itself and its hospitals in the long term.
While Steward is a for-profit entity, many Massachusetts hospitals are registered as non-profits, adding to the complexity of the situation. Mariano and Michlewitz met with representatives from communities served by Steward facilities to align their positions and emphasize that the Legislature lacks the financial resources to provide a large bailout.
Steward, on the other hand, has signaled its commitment to stabilizing the company through a significant financial transaction and is engaged in a merger and acquisition process to bring in a significant equity partner. However, concerns about overdue loans, rent payments, and the potential for facilities to come under new ownership continue to raise doubts about the company’s financial stability.
The Massachusetts Legislature has already appropriated $54 million to Steward over the last three years using federal COVID-19 relief funds. Michlewitz highlighted the state’s “difficult fiscal climate” and the need to be mindful of further financial support for Steward. The company also received significantly less in American Rescue Plan Act funding due to a lack of financial transparency.
Mariano emphasized the Legislature’s cautious approach, stating, “We’re not going to pour money into a blind hole,” referencing the need for more transparency and accountability from Steward.
As negotiations between Steward and the Secretary of Health and Human Services Kate Walsh continue, the Legislature remains cautious about any potential financial commitments. Despite the challenges, the goal remains to maintain stability for patients and staff across Steward’s facilities in Massachusetts.
Historically, Steward Health Care has faced scrutiny for its financial management, including the closure of Quincy Medical Center in 2014. The ongoing financial challenges at Steward highlight the complex relationship between for-profit and non-profit hospitals in Massachusetts and the difficult decisions facing top House Democrats as they navigate the company’s financial crisis.
The situation at Steward Health Care continues to evolve, and the Massachusetts Legislature remains vigilant in its approach to providing financial support in the face of the company’s ongoing challenges.
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