Saving Steward Health Care hospitals could cost $700 million
Gov. Maura Healey’s plan to bail out five bankrupt Steward Health Care hospitals – including hospitals in Brockton, Taunton and Fall River – could cost Massachusetts taxpayers $700 million by 2027, the Boston Globe reported Saturday, citing “people with direct knowledge of the rescue plan.”
Nine days ago, Healey held a press conference where she announced that a financing plan had been reviewed with legislative leaders and would help “save” several hospitals as they were handed over to potential new buyers. The governor’s office said at the time the plan included cash advances, capital support and maximizing federal grants, but did not provide many other details.
“Those are the three sources and we are working with the buyers to make sure they have the resources they need to be able to meet their bids,” Health Minister Kate Walsh said on August 16, adding that government funding would be available for three more years to help with staffing and capital investments.
Who is buying the hospitals in Brockton, Taunton and Fall River?
Governor Healey announced on August 16 that agreements were in place whereby St. Elizabeth’s Medical Center in Brighton and Good Samaritan Medical Center in Brockton would be sold to Boston Medical Center, Lawrence General Hospital would acquire Holy Family Hospital facilities in Methuen and Haverhill, and Lifespan would acquire Morton Hospital in Taunton and Saint Anne’s Hospital in Fall River, provided the agreements are finalized and approved. The agreement with St. Elizabeth also calls for the state to seize land through an expropriation process.
While Healey made the plan public, saying it was a “win for Massachusetts” and “to close out Steward,” her team has since declined to provide details on the cost to taxpayers or estimate the size of the relief package.
Controversial Steward CEO Ralph de la Torre attends the Versailles Olympics while Steward announces hospital closures
Are the deals completed?
No, none of the hospital contracts have been approved by the Federal Bankruptcy Court. The next court hearing is scheduled for Tuesday.
Where does the money come from?
Healey was asked on Aug. 16 where the money for the hospital contracts would come from, and she said she was “working that out with her finance team right now.” Walsh also said the administration is working on “funding sources,” and neither Walsh nor Healey estimated the total amount.
“At this time we are unable to comment on the financial terms or discussions due to ongoing negotiations,” Olivia James, spokeswoman for Health Minister Kate Walsh, told the News Service on Friday, August 23. The statement suggests that the terms could still change.
Healey’s office and Walsh did not immediately respond to a request Saturday to confirm or deny the plan’s reported $700 million cost. It is also unclear how the hospital rescue plan’s costs will affect other health care spending in Massachusetts.
“The details are going to be really important here,” Doug Howgate, president of the Massachusetts Taxpayers Foundation, said Saturday afternoon.
Howgate said he could imagine some of the funding being secured within the MassHealth system, but others would require “legislative action” from the Legislature. Understanding the components of the plan “sooner rather than later” would be helpful and will allow people to understand, for example, how state and federal funding is divided or the short-term and long-term costs.
“Until we see more about it, it’s hard to judge what the plan is really about,” Howgate said.
In a statement to the News Service on Saturday afternoon, Walsh did not confirm an estimate of the state’s funding plans and reiterated some of the points the administration had previously made about its behind-the-scenes efforts to keep Steward hospitals operating well into the future.
“The state has worked to assist the bidders in their attempt to acquire the right to continue operating these hospitals,” Walsh said. “To ensure a smooth transition of ownership of these hospitals and to ensure that patients continue to have access to care, the state will provide financial assistance, including advancing a portion of the funds the hospitals would already receive from serving MassHealth patients. The additional net cost to the state will be significantly less than the total package. The state’s financial assistance will not require additional legislative funding. Details of any state commitments will be announced when the deal is finalized.”
Closure of hospitals in Carney and Nashoba Valley approved until August 31
The bankruptcy court has approved Steward’s plans to close Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer by Aug. 31, and barring surprise interventions, those two facilities appear to be entering their final week of operation.
