Steward To Close Two Ohio Hospitals, Pennsylvania Facility At Risk

Dive Brief:

• Steward is closing two Ohio hospitals with another in Pennsylvania at high risk of closure as the health system continues to limp through bankruptcy.
• The closures of Trumbull Regional Medical Center and Hillside Rehabilitation Hospital, both in Warren, Ohio, come after Steward failed to find a buyer for the facilities. The hospitals will start closing on or around Sept. 20, according to the system.
• Meanwhile, Sharon Regional Medical Center in Sharon, Pennsylvania — drastically short on funds — could soon close without a buyer, according to court documents.

Dive Insight:

Steward’s financial distress has reached its hospitals in Ohio and Pennsylvania.

The Dallas-based system declared bankruptcy in May after stacking up $9 billion in debt. Since then, Steward has scrambled to sell as many of its assets as possible, including its 31 hospitals in 8 states and a major physician group, Stewardship Health.

In Ohio, “despite every effort made to attract qualified buyers, there have been no actionable offers received for these hospitals. Therefore, due to our significant cash constraints we are now in the regrettable but unavoidable situation where the process of closing the facilities must begin,” a Steward spokesperson said in a statement.

State and federal lawmakers have blamed Steward’s precarious financial situation on corporate profiteering on the part of the system’s leadership, especially CEO Ralph de la Torre. De la Torre was even subpoenaed to testify before the Senate about his role in Steward’s financial collapse.

“The closure of Hillside is a tragic result of greed-driven hospital executives, backed by private equity, who prioritize their yachts and private jets over patient care,” said Rick Lucas, the president and executive director of the Ohio Nurses Association, in a statement. “This decision leaves our community without crucial rehabilitation services and forced our dedicated team of nurses and health professionals into unemployment due to Steward’s unchecked greed.”

ONA represents medical workers at Hillside, 170 of which will be affected by the closure, according to a layoff notice filed with Ohio. At Trumbull, 765 employees will lose their jobs when the hospital shutters.

Sharon Regional, a 163-bed acute care hospital, could soon share those facilities’ fates. Steward asked the state for $1.5 million in funds by Friday to help keep the “badly neglected” Sharon Regional open, according to a notice filed by the state attorney general in bankruptcy court.

Pennsylvania is considering Steward’s request, but needs more detailed financial information, along with more time to mull over the ask, Attorney General Michelle Henry said.

On Thursday, a judge ordered Steward to hold off on closing the facility until after the end of this month, but directed the system to work with the state and potential buyers to try and find a solution keeping Sharon’s doors open, according to Reuters. Pennsylvania has located a potential buyer: Meadville Medical Center.

Steward has had difficulty selling its assets, including publicly losing buyers and pushing back the timeline for sales several times. Negotiations are complex, given Steward doesn’t own the land its hospitals operate on and different lenders are jockeying for their slice of any proceeds.

Earlier this week, Steward sued its landlord, Medical Properties Trust, for allegedly interfering with plans to sell its hospitals, including by speaking directly with potential bidders without the system’s consent.

In a bankruptcy hearing earlier this month, Steward said it’s finalizing sales agreements for its hospitals in Louisiana and Arkansas, and has received bids for some facilities in Pennsylvania and Ohio. Last week, Orlando Health bid more than $439 million for Steward’s hospitals in Florida, according to court documents, though Steward’s landlord, Medical Properties Trust, has objected to the sale.

In Massachusetts, the state earlier this week brokered a deal to keep five of Steward’s hospitals open amid the bankruptcy by transferring them to new owners. Steward already announced the impending closure of two other hospitals in the state, while another Steward facility, Norwood Hospital, remains closed following serious flooding in 2020.

And, earlier this month, Steward reached a deal to sell its physician network to a private equity firm for $245 million.