BOSTON—Steward Health Care announced Friday that is it closing two hospitals in Massachusetts because it received no qualified bids for the facilities after declaring bankruptcy earlier this year.
Steward’s bankruptcy is being investigated by the U.S. Senate, with Democrats accusing the Dallas-based company of allowing private equity executives to strip the firm of its assets, despite the harm it causes to local communities.
In a statement announcing the closures, Steward said it has been working to sell or transition all its Massachusetts hospitals and is in active final negotiations to sell six of them.
“Despite the extensive sale process, which involved close coordination with lenders and regulators, there were no qualified bids for two hospitals, Carney Hospital and Nashoba Valley Medical Center, and, unfortunately, they will be closing on or around August 31,” the company said.
Carney Hospital is located in the Dorchester neighborhood of Boston and Nashoba Valley Medical Center is in Ayer, a town about 45 miles (72 kilometers) west of Boston.
In May, Steward said it planned to sell off all its hospitals after announcing that it had filed for bankruptcy protection. The company operates about 30 hospitals across eight states.
Steward called the situation “challenging and unfortunate” and said the effect it will have on patients, employees and the communities is regrettable. The company said it is working with appropriate state and federal agencies during the closure process.
“We will work closely with our Carney and Nashoba patients to help them find the best possible care alternative and with our valued employees and health care professionals to assist with this very difficult transition,” the company said.
Massachusetts Gov. Maura Healey blamed the closures on what she called the greed and mismanagement of Steward Health Care and company CEO Ralph de la Torre.
“These hospitals have long served their communities – their closures are about more than the loss of beds, doctors, and nurses,” Healey said in a written statement. “We want to assure the people of Massachusetts that we have prepared diligently for this moment and will take all available steps to help facilitate a smooth transition for impacted patients and employees.”
Healey said for the company’s remaining hospitals in Massachusetts, Steward has received bids to not only maintain but to improve the hospitals.
Carney and Nashoba remain open for now and will proceed through an orderly and regulated closure, according to Healey.
The next step in the process for the two hospitals is for a bankruptcy judge to approve Steward’s motion to close. Steward is required to send a notice of closure to the state Department of Public Health, which will then work out a transition for patients and workers.
The state has created an online interactive dashboard allowing patients to map nearby hospitals, understand the services available at each location, and view monthly updates on patient volumes and available beds to help residents connect to nearby services.
In June, an average of 13 of Carney’s 83 medical beds were filled and an average of 11 of Nashoba’s 46 beds were filled, according to the state.
On Thursday, a Senate committee voted Thursday to authorize an investigation into the bankruptcy of Steward Health Care and to subpoena de la Torre.
The subpoena would compel de la Torre to testify before the Senate Health, Education, Labor, and Pensions Committee at a hearing on Sept. 12.
Committee Chair Sen. Bernie Sanders, the Vermont independent, said Thursday that the Steward bankruptcy shows the dangers of allowing private equity executives to make huge amounts of money by taking over hospitals, loading them up with debt and stripping their assets.
A group of Democratic members of Congress, led by Markey, has also sought reassurances that workers at hospitals owned by Steward will have their health care and retirement benefits protected.
Markey, also a member of the HELP committee, said in a statement Friday that Steward must do everything it can to keep the remaining hospitals open.
“The callousness demonstrated for the health and well-being of the people of Massachusetts is nothing short of astonishing,” Markey said. “Steward Health Care — led by Dr. de la Torre and facilitated by private equity and real estate investment trusts — intentionally purchased safety net hospitals that communities rely on, and they ran them into the ground in their efforts to extract maximum profits”
