Dallas-based Steward Health Care has shared a 'six-point action plan' to address its ongoing financial troubles and create a more sustainable business as the health system moves into its next phase of operations.
The action plan comes amid ongoing concern from federal lawmakers, Steward employees, and community members over the potential risk of Steward hospital closures in Massachusetts. The health system was also approximately $50 million behind in year-end rent to Medical Properties Trust, the largest hospital landlord in the U.S.
"First and foremost, we want to continue to do the right thing for patients, our staff, and our communities," Michael Callum, MD, executive vice president for physician services and interim president of the northeast region for Steward, said in a Feb. 23 news release. "That is our commitment going forward. In the future, that will take a different form, but the mission remains the same."
Here are the six pillars the plan includes:
1. Steward, along with its current lenders, has finalized a financing agreement that will provide a $150 million cash infusion in additional liquidity as the health system moves to sell its physician group Stewardship Health. The funding will help Steward reset operations and address vendor obligations to ensure a sustainable operating model. Along with a financial commitment increase to Steward, the lenders have agreed to extend their forbearance agreement through April 30 to allow the health system time to execute the plan.
2. Steward has negotiated new labor agreements with the MNA and SEIU to secure and maintain its pension plan. The health system is incentivizing employees to ensure that its medical centers and physician's offices remain open and serving patients. Steward has implemented a plan to attract nurses to its busiest hospitals by offering "referral" fees to existing employees of up to $40,000 for each employee hired.
3. Steward is proactively working to sell its non-essential assets immediately. This includes Steward-owned aviation, downsizing its non-patient footprint through back-office consolidation, with many already completed. The health system is actively looking for strategic opportunities to remove non-core assets and focus on improving its liquidity position.
4. Steward has tapped Alix Partners to advise the health system's restructuring in an effort to support its hospitals and deliver high-quality care. Steward has named new leadership in its northeast region to focus on quality patient care.
5. Following Massachusetts Gov. Maura Healey's recent letter to Steward pushing for it to disclose financial documentation, the health system shared a response letter on Feb. 21. "Since November 2023, Steward has worked to comply with every request of the Massachusetts Attorney General’s Office and the EOHHS," the release said. "It has supplied all of the audited financial statements that have been prepared. Steward has supplied draft statements with footnotes for years where the audit remains incomplete. Steward has also provided over 613 megabytes of documentation (tens of thousands of pages of information) to the Massachusetts attorney general's office’s and will continue to provide more."
6. The senior leadership at Steward plan to meet with the Massachusetts Commonwealth public officials to discuss the "go forward" plan to ensure continued patient care.
Steward comprises 33 hospitals across Arizona, Arkansas, Florida, Louisiana, Massachusetts, Ohio, Pennsylvania and Texas, including multispecialty medical groups, urgent care centers, skilled nursing facilities and behavioral health centers. It has 30,000 employees, including more than 4,450 providers.