Dallas-based Steward Health Care's financial woes have come to a head in recent weeks and forced the physician-led system to take action.
Steward is the largest private, tax-paying hospital system in the country with 33 hospitals, more than 25 urgent care centers and 107 preferred skilled nursing facilities. The system reports caring for around 2.2 million patients annually and providing 12 million patient encounters per year alongside the Steward Medical Group, which handles more than 6 million patient encounters annually.
The system has shrunk in the last year and more changes are on the horizon.
Last year, Steward sold its sites in Utah to Chicago-based CommonSpirit Health, which included five hospitals and 35 medical group clinics. Steward also closed Texas Vista Medical Center in San Antonio last spring.
In January, Steward closed Port Arthur-based Medical Center of Southeast Texas after realizing the campus was underutilized, according to a spokesperson. Medical Center of Southeast Texas was a physician-owned hospital with two locations, and it consolidated into one.
News circulated in late January that Steward was looking to sell four Massachusetts hospitals after falling $50 million behind on rent to Medical Properties Trust. Steward points to low pay rates from government payers as contributing to its financial challenges, as a large percentage of its patients are on Medicare or Medicaid.
Lawmakers worried Steward may close some of its Massachusetts locations, but Michael Callum, MD, executive vice president of Steward, told Becker's the system is working on a "significant financial transaction" that would stabilize operations and avoid hospital closures in the state.
Steward is a for-profit health system that had private equity backing from Cerberus Capital Management until 2020. Lawmakers in Massachusetts are scrutinizing the for-profit model of healthcare amid Steward's financial challenges.
"I think the underlying message is that the for-profit model does not work," U.S. Rep. Stephen Lynch, D-Mass., told WBUR, a nonprofit local news organization. "[Steward] is a for-profit healthcare network, and I firmly believe that it's very difficult to pursue two missions: to generate profits and still provide high quality healthcare."
Other health systems have also made moves to distance themselves from Steward after raising questions about the quality of care. Mass General Brigham removed physicians from two Steward hospital campuses on Jan. 26 after certain surgical equipment wasn't guaranteed.
The physicians may return to the hospitals if Mass General deems they have the tools needed to safely perform surgery.