Steward Health Care, which has filed for Chapter 11 bankruptcy protection, announced it will close two of its Massachusetts hospitals, leading to the layoffs of more than 1,200 employees.
Before that move, however, Stewart declined an offer to purchase all eight of its hospitals in that state, according to NPR’s Boston affiliate, WBUR.
Steward, which owns eight hospitals in Florida, said the offer from Michigan-based Insight Health was not viable. However, an official from Insight said his company was willing to take on the expensive lease payments to Steward’s de facto landlords.
“Insight made a bid for all of Steward's Massachusetts hospitals and we indicated a willingness to negotiate terms and lease payments,” Atif Bawahab, Insight’s chief strategy officer, said in a statement. “A mutual agreement was not reached, but we remain interested in being part of the solution to keep the hospitals' doors open.”
Bawahab said Insight has “extensive experience” in taking over and turning around “distressed, underperforming health care organizations.”
Two hospitals closing this month
Steward is moving to shutter Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer by the end of August, saying they didn’t receive any “qualified” bids for those hospitals, WBUR reported.
Houston-based federal bankruptcy Judge Christopher Lopez last week ruled that Steward met the legal standard for the closures and approved the Dallas-based company’s request do so.
The layoffs will affect 753 employees at Carney and 490 at Nashoba Valley, according to Steward in notice mandated by the federal Worker Adjustment and Retraining Act. Steward and state officials have said they were working to help the employees find other jobs.
In a statement, the Massachusetts Nurses Association called for action at the state level to save the hospitals. Carney employees held a rally Monday in Dorchester, where they called on state lawmakers to prevent the closures.
Steward sold its Massachusetts real estate to Medical Properties Trust in 2016. The assets now are jointly owned by MPT and Macquarie Asset Management. Also involved is Apollo Global Management, a lender to MPT and Macquarie.
Eventually, Steward’s debt mounted into the millions of dollars from missed lease and vendor payments, and it filed for Chapter 11 in Texas in May.
Steward said it was trying to complete deals with unnamed buyers for its other Massachusetts facilities, negotiations that a Steward lawyer called “immensely complex.”
Company CEO under fire
Massachusetts Gov. Maura Healey, Sens. Edward Markey and Elizabeth Warren are among the lawmakers who have blamed Steward CEO Dr. Ralph de la Torre for the financial predicament.
They have said de la Torre took the company’s nonprofit hospitals public and then facilitated the sale of the land under the buildings to Medical Properties Trust and Macquarie Infrastructure Partner.
The Senate Health, Education, Labor and Pensions Committee is investigating the bankruptcy and have subpoenaed de la Torre to testify at a hearing Sept. 12.
Federal authorities in Boston also opened a investigation over the bankruptcy.
In Florida, Steward operates Coral Gables Hospital, Hialeah Hospital, North Shore Medical Center and Palmetto General Hospital in Miami-Dade County; Florida Medical Center in Broward; Melbourne Regional Medical Center and Rockledge Regional Medical Center in Brevard; and Sebastian River Medical Center in Indian River.
The sale of those hospitals is slated for a second phase of the bankruptcy plan.
