Even as a pair of Massachusetts hospitals are about to be shuttered and leave more than a 1,000 employees out of work, the Herald has learned that bankrupt Steward Health Care received at least one offer for all eight of its Bay State properties, but declined to accept it before announcing the closures of Carney and Nashoba Valley hospitals.
Following inquiries from the Herald, Atif Bawahab, the Chief Strategy Officer at Michigan-based Insight, confirmed that his company did indeed try to buy all of the now-bankrupt Steward’s Bay State hospitals as a single package, but that their bid was not accepted before Steward announced it would close Carney Hospital in Boston and Nashoba Valley Medical Center in Ayer.
“Insight made a bid for all of Steward’s Massachusetts hospitals and we indicated a willingness to negotiate terms and lease payments. A mutual agreement was not reached,” he said.
Last week, a Texas-based federal bankruptcy judge said Steward was within its rights to close Carney and Nashoba, if that’s what they determined is the best course of action as they navigate through Chapter 11 bankruptcy proceedings.
Dallas-based Steward filed for bankruptcy protections in May, following months of reporting on its inability to keep up with mounting debts.
Gov. Maura Healey’s administration was quick to respond to the bankruptcy filing with an emergency operations plan and promises the hospitals would remain open, but that didn’t stop Steward from telling Judge Christopher Lopez just how bad their finances were and that they would have to sell off their hospital properties to fulfill their credit obligations.
Healey and other lawmakers have insisted that the company’s CEO, Dr. Ralph de la Torre, is to blame for Steward’s failure, after he took the company’s non-profit hospitals public and then facilitated the sale of the land out from under the buildings.
Debts to the company’s new landlords, Medical Properties Trust and Macquarie Infrastructure Partners, as well as to vendors and suppliers, mounted quickly after the land was sold, and eventually it was learned Steward was $9 billion in debt.
A Macquarie representative who asked for anonymity in order to freely discuss Steward’s closure, said that when the company joined a partnership with MPT in 2021, it did so hoping the investment would keep for at least a decade. Macquarie, the representative said, invests on behalf of union pension funds owned by police and fire department employees, which require stable investment.
A closure at any of the properties, let alone two, they said, was not what the company had in mind when it bought into the landlord business. It’s strange then, the Macquarie rep noted, that Steward could not come to an agreement with Insight, especially considering the clinical technology company still wants to buy the two closing Steward properties.
“We remain interested in being part of the solution to keep the hospitals’ doors open,” Insight’s Bawahab said in a statement.
Taking over failing hospitals is even something of a specialty for the company, Bawahab said. Insight, founded in 2008 by neurosurgeon Dr. Jawad Shah in Flint, Michigan, purchased Chicago’s Mercy Hospital from Trinity Health in 2021 to prevent it from closing.
“At Insight Health System, we have extensive experience assuming leadership of distressed, underperforming healthcare organizations across the country and turning them into sustainable operations that meet the needs of the communities we serve,” he said.
In the end, according to essentially every party that returned a request for comment on this story, Steward was the only player with the power to take a bid and determine it “qualifying” such that it could have prevented closure of Carney and Nashoba.
A spokesperson from the Executive Office of Health and Human Services, acknowledged the offer for all eight hospitals. Insight may have placed such a bid, they said, but that doesn’t mean those facilities actually received “qualified bids” as far as Steward was concerned. Healey, they noted, could not make Steward accept a bid.
“Carney and Nashoba Valley did not receive qualified bids. Our focus is on supporting patients, clinicians and staff through this transition, and doing everything in our power to get Steward to finalize deals to save the remaining hospitals,” they said.
That’s in line with what Steward said in announcing the hospitals’ closure, which they said will occur sometime around the end of the month.
“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.
Judge Lopez has approved that timeline, and lawyers speaking for the Commonwealth assured the judge that the several dozen patients at those hospitals will be well seen to.
In addition to Carney and Nashoba Valley, Steward owns and operates Good Samaritan Medical Center in Brockton, Holy Family Hospitals in Haverhill and Methuen, Morton Hospital in Taunton, Saint Anne’s Hospital in Fall River, and St. Elizabeth’s Medical Center in Brighton. Their Norwood Hospital has been closed since 2020 due to flooding, and closed New England Sinai Hospital permanently in April.
A representative from Steward declined to comment.
