Steward Will Lay Off More Than 1,200 Workers In Massachusetts

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Dive Brief:

• Steward Health Care will lay off 753 employees at its Carney Hospital in Boston and 490 workers at Nashoba Valley Medical Center in Ayer, Massachusetts at the end of the month, according to a Worker Adjustment and Retraining Notification filed last week.
• News of the cuts come just a day after a federal court approved Steward’s plans to close the facilities, which Steward said are losing money and have low patient volumes. Steward attempted to find a buyer for the hospitals during a months-long marketing process, however, the system said it received no qualified bids for the properties. 
• A spokesperson for Steward said the system is working to find roles for some of the impacted employees, noting there are “more than a thousand jobs open at other Steward hospitals” statewide.

Dive Insight:

Steward entered Chapter 11 bankruptcy restructuring in May with the intention of selling off its 31 hospital portfolio expediently and keeping hospital doors open, according to statements from the health system’s legal team.

However, Steward has acknowledged from the beginning of the sale process that some properties might be less attractive to bidders than others, and that some hospitals could close without buyers.

Carney and Nashoba are among the worst performing hospitals in Steward’s portfolio, according to comments from Steward’s attorneys made in bankruptcy court last week. The financially struggling properties, that primarily serve low-income patients, failed to elicit a qualified bid.

Attorneys for the Massachusetts Nurses Association urged the court to keep the hospitals open despite the lack of qualified bids. Sam Alberts, counsel for the MNA, said in court that in other healthcare bankruptcies, hospitals had sold for as little as a single dollar in order to keep facilities from shuttering.

Alberts warned that if Carney and Nashoba shut their doors, patients who have to travel further for care could die and employees might face negative impacts from possible layoffs. Still, bankruptcy court Judge Christopher Lopez approved the closures, noting they were legally sound.

State officials called the closures disappointing but unsurprising. 

“This is not over,” said Gov. Maura Healey in a statement to Healthcare Dive last week. “We want to assure the people of Massachusetts that we have prepared diligently for this moment and will take all available steps to help facilitate a smooth transition for impacted patients and employees.”

Part of that smooth transition period is keeping the hospitals open for a little while longer, according to Healey. The state has statutory a 120-day notice period for hospital closures. Steward’s plan to close the hospitals by Aug. 31 falls short of that requirement. 

Last week, Healey suggested to reporters that the state could require Steward to keep the facilities open, according to a report from Boston 25 News.