Optum, parent company of ASC chain SCA Health, will acquire financially troubled Dallas-based Steward Health Care's physician group, The Boston Globe reported March 26.
An Optum subsidiary filed a notice March 26 with Massachusetts' Health Policy Commission to acquire the physician group, Stewardship Health, for an undisclosed amount, according to the report. The commission has 30 days to assess the effects of the proposed transaction on healthcare and could conduct a more extensive review.
The sale is a part of the 33-hospital system's plan to mitigate financial distress, including falling $50 million behind on rent. Steward went from being purchased for $895 million in 2010 to losing more than $800 million from 2017 to 2020. In February, Steward released a plan to address financial issues, including a financing agreement with a $150 million cash infusion in additional liquidity as the system moved toward the sale of its physician group.
The deal has drawn scrutiny from lawmakers, many of whom have repeatedly accused Steward of prioritizing shareholders over public health, according to the Globe.
Sen. Elizabeth Warren said in a March 26 statement that while her top priority is ensuring the hospitals remain open, "Steward executives have no credibility, and I am concerned that this sale will not benefit patients or health care workers, or guarantee the survival of these facilities."
"Optum, a UnitedHealth Group subsidiary, is already the largest employer of physicians in the country — controlling over ten percent of American doctors — which means this deal raises significant antitrust concerns in Massachusetts and nationally," she added.
Steward is looking to transfer ownership of all nine Massachusetts hospitals and will close its Stoughton, Mass.-based rehabilitation hospital on April 2. Additionally, Steward closed San Antonio-based Texas Vista Medical Center in May and Port Arthur-based Medical Center of Southeast Texas last month.
Optum has seen soaring growth in the last year, adding nearly 20,000 physicians in 2023. The group's growth is "raising antitrust and noncompete concerns as more payers and private equity firms pursue medical practice acquisitions," according to a December report from Medscape.
“Any potential transfer of Stewardship Health should center around the needs of patients and help stabilize — not further harm— the commonwealth’s already fragile healthcare system," Massachusetts Health and Hospital Association President and CEO Steve Walsh said in a statement shared with Becker's. "We believe a transaction of this magnitude must be subject to a stringent and transparent approval process that invokes Massachusetts’ best oversight tools – the very same oversight that local hospitals are held to.”
Becker's has reached out to StewaOptum and will update this story as more information becomes available.