Alan Sager, PhD, professor of health law, policy and management and director of the health reform program at Boston University School of Public Health, has been conducting research on hospital closures for years.
"I think the underlying problem is we often lose the hospitals we most need," Dr. Sager told Becker's.
When state governments don't have their arms around the problems affecting healthcare, Dr. Sager said every crisis becomes a surprise. Crises like Steward Health Care.
"When you don't have a functioning free market or competent government, what happens is called anarchy," Dr. Sager said. "Especially when $1.4 trillion in yearly spending on hospitals is at stake. Against that background, Steward is like the froth on the toxic waste dump. Invisible, it smells and it was preventable."
Apart from falling $50 million behind on year-end rent, Steward has received backlash from state and federal lawmakers, employees and concerned community members in response to the risk of hospital closures.
More specifically, concerns have risen over the potential sale of four of Steward's nine Massachusetts hospitals. However, the health system recently shared that it now has the ability to put a financial safety net around all of them and has no current plans to close its hospitals.
"Moreover, the company is advanced in an M&A process that would bring in a significant equity partner to our physician organization, and the company has already received very significant bids as part of this process," Michael Callum, MD, an executive vice president at Steward, said in an employee message shared with Becker's.
To combat situations like Steward's, Dr. Sager, along with some of his Boston University colleagues, have worked on four suggested steps over the last 30 years for state governments to use in preparing for the event of needed hospital closures.
The four steps are: Draw up a list of needed hospitals and specific services, and monitor each needed institution's finances and operations closely; implement a serious hospital receivership law and prepare to use it — identify competent receivers in advance; develop a hospital stabilization trust fund financed by "very small" hospital revenue yearly assessments; carefully look at whether needed hospitals' revenues are adequate to finance efficient needed care delivery — remedy when needed.
"I think the problem here is if you're gonna play poker with hospitals, it's really strip poker where Steward, at least, has been stripping hospitals of their value," Dr. Seger said. "Healthcare is not poker. We're not gambling here. Our healthcare is essential to our health."