Steward Health Approved to Sell 6 Hospitals at a Loss

The decision comes after months of negotiations and legal proceedings, with the hospitals in question located in critical communities across the state. Despite the sale representing a loss for Steward Health, the move is seen as a crucial step toward addressing the company’s broader financial challenges.

Steward Health entered Chapter 11 bankruptcy earlier this year, citing unsustainable debt loads and operational challenges exacerbated by the COVID-19 pandemic. As part of its restructuring plan, the company sold six Massachusetts hospitals, struggling financially despite serving critical roles in their local communities.

The bankruptcy court approved the sale on Tuesday, understanding that the transaction would help Steward reduce its financial liabilities. While the sale price has not been disclosed, sources close to the deal indicate that it falls well below the original purchase price for the facilities, leading to a significant financial hit for Steward.

Impact on local communities

Some hospitals are up for sale as their regions' primary healthcare providers, raising concerns among residents and healthcare workers about potential service disruptions. Steward officials, however, assured the court and the public that the sale would not lead to hospital closures or reductions in patient care.

“We understand the concerns of the communities affected by this sale,” said a Steward spokesperson. “We are committed to ensuring a smooth transition and continued high-quality care at these facilities, even as they transfer ownership.”

The spokesperson also noted that the sale is part of a broader strategy to focus on Steward’s core assets and prioritize long-term sustainability. The company aims to streamline operations.

Steward Health’s financial troubles reflect broader challenges in the U.S. healthcare system, particularly for smaller and midsized hospitals. Many facilities have been grappling with rising operational costs, declining patient volumes, and the lingering effects of the pandemic, which disrupted regular care and strained resources.

In Massachusetts, where healthcare is a heavily regulated industry, hospitals have faced additional pressures to maintain quality while controlling costs. For-profit hospital operators like Steward have found it increasingly challenging to balance providing essential services and remaining financially viable.

Analysts have noted that Steward’s aggressive expansion strategy, which involved acquiring numerous hospitals nationwide, may have contributed to its current financial woes. The company’s model of running community hospitals as for-profit entities has been debated, with critics arguing that profit motives can sometimes clash with patient care priorities.

Looking ahead

As Steward Health moves forward with the sale, attention will now turn to the new owners of the Massachusetts hospitals. It remains to be seen how the facilities will be managed and whether the transition will address the financial challenges that plagued Steward’s ownership.

For now, the hospitals and the communities they serve face an uncertain future, though the court’s approval marks a step toward resolving Steward Health’s ongoing financial crisis.