Steward Health Care to Sell All 31 Hospitals in Bankruptcy Restructuring
Steward Health Care, one of the largest physician-led hospital operators in the country, has announced plans to sell all 31 of its hospitals as part of a bankruptcy restructuring process. The decision comes after the company filed for Chapter 11 bankruptcy, citing financial challenges exacerbated by the COVID-19 pandemic.
According to court documents submitted to the U.S. Bankruptcy Court in Houston, Steward initiated various marketing and sale processes for its hospitals before the commencement of Chapter 11. The company owns hospitals in eight states, including Massachusetts, Arizona, Ohio, Pennsylvania, Arkansas, Louisiana, Texas, and Florida.
The plan is to explore reorganization around a rationalized hospital portfolio and work with stakeholders to find solutions for hospitals that cannot be sold. Steward’s goal is to ensure that zero hospitals are closed as part of this process.
Medical Properties Trust, the company’s landlord, is financing the reorganization and will pursue value-maximizing sales while exploring a reorganization around a smaller footprint of hospitals. Steward is also finalizing a deal with Optum to sell its physician group as part of the restructuring.
The bankruptcy filing comes after Steward faced declines in patient visits, labor costs, reimbursement challenges, and other financial pressures. The company’s strained liquidity led to disruptions in vendor relationships and operational challenges, particularly in its hospitals in Northern Massachusetts.
A final hearing on certain motions related to the bankruptcy restructuring is scheduled for June 3. Steward’s ultimate goal is to emerge from Chapter 11 with a more sustainable financial structure and operational model.