Financially troubled Steward Health Care has announced plans to sell its physician network to Optum Care, a division of UnitedHealth Group, for an undisclosed sum.
Dallas-based Steward has faced significant financial trouble in Massachusetts, where it operates nine healthcare facilities. It will permanently close New England Sinai Acute Long-Term Care And Rehabilitation Hospital in Stoughton on April 2.
WBUR in Boston reported that Steward revealed its plan to sell the physician network to Optum in a notice to the Massachusetts Health Policy Commission on March 26. “The deal is part of Steward's effort to climb out of a financial hole that has shaken the Massachusetts healthcare industry,” WBUR reported. “Public officials and healthcare leaders are deeply concerned the company could shutter medical services amid its financial troubles, which could reduce patients' access to care and destabilize the state's healthcare system.”
NECN quoted David Seltz, director of the Health Policy Commission: ”This is a significant proposed change involving two large medical providers, both in Massachusetts and nationally, with important implications for the delivery and cost of healthcare across Massachusetts. Details of the proposal will be reviewed by the HPC to examine potential impacts on healthcare costs, quality, access, and equity. The sale cannot be completed until after the HPC’s review and any concurrent review by state or federal antitrust authorities."
Sen. Elizabeth Warren (D-Mass.) said that Steward’s latest plan raises more serious questions about the future of the Massachusetts healthcare system.
“My top priority is ensuring Steward’s Massachusetts hospitals remain open. But Steward executives have no credibility, and I am concerned that this sale will not benefit patients or healthcare workers, or guarantee the survival of these facilities,” she said in a statement. “It would be a terrible mistake for Steward to be allowed to walk away while looting Massachusetts hospitals one more time. Optum, a UnitedHealth Group subsidiary, is already the largest employer of physicians in the country – controlling over 10 percent of American doctors – which means this deal raises significant antitrust concerns in Massachusetts and nationally. The Department of Justice is already reportedly investigating UnitedHealth’s relationship with its Optum health services arm. I’ll continue working in partnership with state officials and health care workers to support the communities Steward serves, protect jobs, ensure a competitive health care marketplace, and hold executives accountable for any wrongdoing.”
Sen. Edward Markey (D-Mass.), chair of the Senate Health, Education, Labor, and Pensions (HELP) Subcommittee on Primary Health and Retirement Security, stated that Steward Health Care is currently facing significant financial insecurity as a result of previously accumulated debt. Steward Health Care was previously owned by Cerberus Capital Management, a private equity company that generated $800 million in profit from Steward, he said.
“After Steward recklessly took on massive debt that is continuing to put hospitals in Massachusetts and across the country into financial crisis, the Massachusetts healthcare system must move away from Steward’s financial insecurity,” Markey said. “With this announcement, Optum must demonstrate that it can meet the even greater responsibility to preserve and protect healthcare access in the Commonwealth, and I hope they will live up to that responsibility by controlling costs and putting patients and providers first.
“But a healthcare system that focuses more on profit motive than patient outcomes needs reform. That is why I am holding a congressional hearing in Boston and have invited Steward CEO Dr. Ralph de la Torre to testify and explain Steward’s position. For-profit companies that elect to participate in the healthcare system must understand that their decisions have direct impacts on communities, and they must and will be held accountable.”
In February, Massachusetts Gov. Maura Healey demanded that Steward Health Care CEO Ralph de la Torre produce financial records to the state that are required of other healthcare systems, but that Steward has refused to submit for years. “This information would provide critical insight into where Steward is prioritizing its resources across the country and whether it chose to put profits over patient care. Steward’s refusal to provide basic levels of transparency over the years has hidden important information about the health system’s financial stability and hindered the state’s ability to take preventive steps to protect access to care,” her statement read.
“For years, you have refused to engage in the same level of basic transparency that every other system in Massachusetts offers by not releasing your audited financial statements,” wrote Healey. “Your continued refusal to do so, particularly at this moment, is irresponsible and an affront to the patients, workers, and communities that the Steward hospitals serve. It also leads to a further breakdown in trust and creates a major roadblock to our ability to work together to resolve this effectively.”
