Steward Health Care International maintains an international presence through two ventures: Steward Colombia, which operates four hospitals in Colombia, and Steward Middle East, which operates in Saudi Arabia and the United Arab Emirates.[8]
History
St. Elizabeth's Medical Center in Brighton, MA, once referred to as Steward's flagship hospital
Steward Health Care was started in 2010, when Caritas Christi Health Care was sold to New York private equity firm Cerberus Capital Management, with Caritas CEO and former Beth Israel Deaconess Medical Center heart surgeon Ralph de la Torre continuing as CEO of the new company.[9] Caritas, founded in 1985 under the ownership of the Archdiocese of Boston, was previously a non-profit healthcare system comprising six financially beleaguered Eastern Massachusetts hospitals as well as a number of other non-acute healthcare facilities. The hospital system transitioned to for-profit following the transaction and was renamed Steward Health Care.
Steward Health Care, being an outlier in a state known for non-profit healthcare, was a controversial company starting in its first few years. De la Torre was regarded by many early on as an ambitious and highly influential figure in healthcare, having goals of building the company on a national level. He stood out as one of the few people willing to invest millions into the system's troubled hospitals, which mostly serve low-income populations who would struggle to access healthcare without them. However, three years later, Steward was reported to be continuing to lose money and multiple attempts to expand outside of Massachusetts had failed.[10] While Steward would eventually achieve its goal of expanding to other states, the first several years focused on in-state growth.
2010-2015: First acquisitions and closures
In September 2011, Massachusetts Attorney GeneralMartha Coakley approved Steward's acquisition of Morton Hospital in Taunton and Quincy Medical Center, both of which were previously non-profit facilities at risk of closing due to financial struggles. The deal required, among other commitments, that both facilities stay open for at least 10 years.[11]
Despite the agreement to keep Quincy Medical Center open for 10 years, Steward announced in November 2014 that the hospital would close by the end of the year.[12] Steward cited operating losses mostly attributed to a surplus in patient beds in the region, coupled with patients being referred more often to nearby South Shore Hospital in Weymouth and Beth Israel Deaconess Hospital's Milton campus. The next month, Steward and the state Department of Public Health reached a deal to keep the hospital's emergency department open until the end of 2015.[13] The emergency room ultimately stayed open until November 2020, almost five years longer than planned.[14]
Operations at Steward's Carney Hospital in Dorchester appeared to benefit from Quincy Medical Center's closure, which saw 125 QMC employees transfer to Carney, including several physicians. Steward reported a 16 percent increase in admissions and a 21 percent increase in outpatient visits in 2015, and new hospital president Walter J. Ramos said the hospital was expecting to break even by the end of the year following several years of losses.[15]
2015-2020: Investment and national growth
2015 ended in a milestone for Steward, as they saw their first-ever profitable year, attributed to a significant drop in expenses.[16]
In September 2016, Steward entered a $1.25 billion deal with Medical Properties Trust, in which MPT would purchase all of Steward's hospital properties for $1.2 billion and pay an additional $50 million for a 5 percent stake in the company. In return, Steward would lease the properties back from MPT. This influx of money would allow Steward to pay back the entirety of Cerberus' initial 2010 investment while the firm would remain a majority owner, in addition to allowing the company to pay back all of its $400 million in debt. The deal became final in September 2017.[17]
In February 2018, Steward announced that its top management would move to Dallas, Texas from Boston.[4]
2020-present
In June 2020, Steward became the nation's largest physician-owned health care system, after Steward physicians, led by Steward founder del la Torre, acquired a 90 percent controlling interest in the company.[20]
Later that month, Steward's Norwood Hospital in Massachusetts was fully evacuated due to damage from flooding caused by an intense rainstorm, leading to power outages across the campus.[21] The hospital remained closed for two years until its demolition in 2020 cleared the property for the construction of a new hospital building.[22] Construction of the new hospital continued into 2024.
In August 2021, Steward closed a $1.1 billion deal to acquire five South Florida hospitals from Dallas-based Tenet Healthcare. In keeping with past financial strategy, they immediately sold the properties to MPT for $900 million in an agreement that Steward would lease the properties.[23]
Shortly following the Florida deal, in September Steward and HCA Healthcare announced an agreement wherein Steward would sell all of its Utah hospitals to HCA.[24] However, in June 2022 the Federal Trade Commission announced that it would sue to block the merger on antitrust grounds, alleging that it would allow HCA, a rival to Steward at the time, to raise healthcare costs in the region.[25] This would lead to Steward and HCA abandoning the proposed merger two weeks later.[26] Steward's second attempt to sell its Utah operations succeeded in May 2023 when they sold to CommonSpirit Health, a Catholic health system. The transaction included Steward's entire presence in the state, including "five hospitals, over 35 medical group clinics, imaging and urgent care centers, and other outpatient ventures."[27] This raised concerns that the area may lose access to reproductive health care given CommonSpirit's position on the matter, though Steward declined to say whether they had even offered this care at their locations prior.[28]
September 2021 was marked in Texarkana, Texas by the groundbreaking of the site of a $227 million project to replace Steward's Wadley Regional Medical Center. Wadley's current campus downtown, which Steward obtained through their acquisition of Iasis, would remain open during construction, with the new campus being constructed about five miles north.[29]
In May 2023, Steward completed the sale of its Utah operations to CommonSpririt Health, in its second attempt to sell since abandoning its deal with HCA the previous year. [30]
In December 2023, Steward announced it would cease operations at New England Sinai Hospital, a long-term acute care hospital in Stoughton, Massachusetts, reporting operating losses of $22 million.[31]
In January 2024, Steward announced that The Medical Center of Southeast Texas' Victory campus in Beaumont would close, and that all services from the Victory campus would be transferred to its main campus in Port Arthur. The Medical Center of Southeast Texas' interim president Brent Cope attributed the closure to the campus being "severely underutilized given the needs in the region." The closure was completed in the beginning of February.
Also in January, it was revealed that Steward was facing significant financial difficulties in their Massachusetts operations, creating fears of possible hospital closures.[32] Part of this stemmed from revelations that Steward owed Medical Properties Trust $50 million in unpaid rent on their properties, in addition to owing several contractors and vendors for unpaid services and equipment.[33] The repossession of medical equipment for unpaid bills was linked to the death of a new mother at Saint Elizabeth's Medical Center in Brighton, who in October 2023 suffered a liver bleed which staff were unable to treat due to the lack of equipment.[34] Steward responded, saying in part that "understanding that the demand for supplies and staff can fluctuate at any given moment due to changing and unpredictable volumes of patients, Steward is confident we have adequate supplies for our physicians, providers, and health care professionals to continue providing high-quality care to our patients." Later that month, U.S. House Representative Stephen Lynch said after a meeting with Steward that the health care system was looking to sell four of its nine Massachusetts hospitals "as soon as possible," including St. Elizabeth's Medical Center in Brighton, Holy Family Hospital's two campuses in Haverhill and Methuen, Nashoba Valley Medical Center in Ayer, and Norwood Hospital, whose reconstruction would also be halted.[35]
On February 2, 2024, Steward announced to employees that they had agreed to a "significant financial transaction" that would allow their Massachusetts hospitals to continue operations while they continued to explore options for selling some facilities to other operators. The terms of the deal and the source of the funding were not immediately disclosed.[36]
The Texarkana Gazette on February 5 reported that work on Wadley Regional Medical Center's replacement campus had halted. Construction firm Robins & Morton said in a memo to subcontractors that in light of Steward's financial difficulties, the firm had "requested evidence of their having made financial arrangements that will allow them to fulfill their payment obligations under the contract." Having not received proper evidence of financing, the firm ordered subcontractors to halt all work on the site.[37]'
Steward's future in individual locales and as a whole remains in question amid its mounting widespread financial and legal issues. Massachusetts lawmakers all but committed to ruling out a bailout, stating that the system had already received $54 million in previous years in the form of COVID-19 relief aid. Also contributing to lawmakers' stance on the issue was Steward's repeated refusal to provide financial reports to the state, a requirement of all hospitals under state law and one which Steward has been battling the state over for years[38] - which was cited as a reason they were provided significantly less American Rescue Plan Act money in the third round of this aid.[39]
Steward Health Care International
Steward Health Care International
Clínica San Rafael, a hospital built and operated by Steward in Pereira, Colombia
At the end of 2017, Steward announced an upcoming international expansion which was finalized in February 2018, in which they took over Vitals Global Healthcare of Malta, creating Steward Health Care International.[40] VGH, an embattled Maltese healthcare company, was the center of a controversial 2015 deal in which it was contracted with the government to take over administration of the island nation's hospitals. The 2015 deal with VGH was widely controversial especially among physicians, who raised concerns both about the government relinquishing control of the publichealthcare system and about VGH's lack of experience in the healthcare sector.[41] In 2018, amid allegations of collusion between VGH and government officials, lack of progress in the rehabilitation of the hospitals, and accusations that VGH was siphoning money out of the country, parties agreed to a deal that would see Steward purchase VGH for just €1, while the Maltese government would pay VGH €50 million to accept the deal.[42] The transfer of Malta's hospitals to Steward did not sate the public's concerns, and Steward's presence remained unpopular until 2023 when Maltese courts annulled the 2018 deal amid allegations of fraud and continued lack of progress in hospital renovations and construction, ultimately returning control of the hospitals to the government.[43]
In late 2020, Steward entered the Colombian healthcare market with the purchase of three hospitals in the country: Hospital Universitario Clínica San Rafael and Clínica Centenario in the capital city of Bogotá, and Clínica Los Nevados in Pereira. CEO Ralph de la Torre spoke about Steward's plans and goals in the nation, saying that COL$102.000 million (US$28 million) would be invested in the three hospitals, most of which would be spent on Los Nevados which had been closed following damage from an earthquake several years prior.[46] De la Torre expressed that Steward wanted to grow significantly in the region, hoping to eventually have "between 10 and 15 hospitals in the country."[47] In 2023, Steward opened two hospitals in Colombia: the new Clínica San Rafael in Popayán[48] and the fully renovated Clínica Los Nevados.[49]
In 2022, Steward International created Steward Middle East, which partnered with Saudi Arabian venture capital company Alfanar to create a joint venture named Steward alf Global Healthcare Company. That year, they signed a contract with the Red Sea Development Company to build and operate a new hospital as part of the Red Sea Project, a massive tourism development under construction on the nation's coast. The company would also be responsible for emergency response planning for the site.[50] Steward Middle East also reportedly included ventures in Riyadh as well as Dubai in the UAE.[51]
In 2023, a Steward representative expressed the company's interest in expanding into Egypt as well.[52]
As of 2024, Steward International was headquartered in Madrid, Spain.[53]
Business model
Steward intended to become a low-price leader in the provision of high quality care.[7] Consistent with this model, the System had taken steps to reduce the direction of surgical patients toward teaching hospitals in the Boston area.[7] The System has also worked with payers to negotiate patient group-oriented budget pricing.
Steward comprises Steward Medical Group and Steward Health Care Network, its network of primary care and specialty providers.[54]
Additional Steward services include Steward Health Choice, a managed risk platform which covers lives in Arizona and Massachusetts.[55]
Steward has received criticism for its approach to health care and transparency, especially following the revelation of significant financial struggles in the beginning of 2024. In 2017, Steward sued the Massachusetts Center for Health Information and Analysis (CHIA) to avoid providing financial information to the agency. CHIA, an independent state agency charged with monitoring the financial condition of Massachusetts' hospital industry,[56] had been in talks with Steward since the previous year in an attempt to reach a deal over its financial disclosures, and had been imposing fines of $1000 per week for delinquency. At the time, Steward was the only hospital system in the state to repeatedly fail to submit required company-wide financial statements.[57] In its suit, Steward said that the financial statements "contain sensitive, proprietary business information related to long-term debt, relationships with investors, retirement plans, and significant transactions that is not otherwise publicly available [...] Steward keeps information contained in the notes [of its financial statements] confidential because releasing the notes would cause harm to Steward." Steward further stated that their concerns were related to CHIA's past publicization of their financial data, and argued that the agency had no authority to collect the information. Litigation was still pending into early 2024, and state officials highlighted this; U.S. House Representative Stephen Lynch said in January 2024, "We had not had advance notice prior to a week ago that they were in difficulty, or that they were contemplating exiting the Massachusetts health care market."[58]
Steward has attributed much of its financial woes in Massachusetts to the COVID-19 pandemic, as well as their system mainly comprising community hospitals which serve low-income populations, where 70% of their patients are recipients of Medicare and Medicaid. They also complained of the gap between the reimbursement rates from public and private insurers pay community hospitals versus larger academic medical centers.[59] State officials, in response, raised questions regarding the use of tens of millions of dollars in pandemic relief provided to the company by the federal government. Health care officials also pointed to the concerns which Steward's financial condition and operations has raised about the role of private equity in healthcare.[60]
Elsewhere, such as in Texas and Arizona, Steward has pointed to under-utilization as a factor in closures. In Phoenix for example, St. Luke's Medical Center's former CEO said the hospital's 2019 closure came as two out of three beds were routinely unoccupied.[61]
Hospitals
Domestic (United States)
List of current and former Steward hospitals in the U.S.
Founded as Tallman Hospital, renamed to Coral Gables Hospital after being purchased by Hospital Affiliates, Inc. in 1971.[64] Purchased by Steward from Tenet Healthcare in August 2021[65]
One of Steward's original hospitals. Originally owned by the city of Haverhill and named Hale Hospital. Renamed Merrimack Valley Hospital when city sold hospital to Essent Health Care.[80] Integrated under the Holy Family Hospital name by Steward in 2014.[81]
Founded as the Jewish Tuberculosis Sanatorium in 1927, originally in Rutland, MA. Renamed New England Sinai when it moved to Jamaica Plain in 1954. Moved to Stoughton in 1976. Purchased by Steward in 2012[99]
One of Steward's original facilities. Evacuated and demolished following flood in 2020, with replacement facility still under construction as of January 2024.[106]
Acquired by Steward in September 2017 as part of purchase of IASIS Healthcare.[133] Ended normal operations in 2019, but was readied for potential use as a surge facility during the COVID-19 pandemic.[134]
Originally named Victory Medical Center Beaumont until purchase by The Medical Center of Southeast Texas in 2015.[142] Acquired by Steward in September 2017 as part of purchase of IASIS Healthcare.[143]
Acquired by Steward in September 2017 as part of purchase of IASIS Healthcare.[147] Construction began in 2021 of future replacement facility at a different location in Texarkana.[148]
Planned for construction in a residential section of the Red Sea Project, a tourism project on the west coast of Saudi Arabia. Emergency department will be specialized for tourism, including having a hyperbaric chamber.[157]
