The bankruptcy saga of Dallas-based Steward Health Care is a complex one with no clear end in sight. As the for-profit health system works to offload the remainder of its 31 hospitals, the million-dollar question remains: What happens to the hospitals that don't receive a proper bid?
Bruce Holstien is CEO of Apella Health, a health system management company whose largest client is Spartanburg (S.C.) Regional Healthcare system, a $2.2 billion, non-profit, six-hospital health system.
"I think that you'll see more hospitals closing," Mr. Holstien told Becker's. "There's probably a little bit of leverage in that and some level of negotiation. I think that nearby hospital systems had an interest … and then started to look at it and decided to wash their hands of it and find the best way to make sure those patients at Steward are taken care of at their facilities for an easy transition."
Steward, which sought Chapter 11 protection May 6, closed Boston-based Carney Hospital and Ayer, Mass.-based Nashoba Valley Medical Center on Aug. 31. The closures resulted in 1,243 employee layoffs. It also shared plans to close Trumbull Regional Medical Center and Hillside Rehabilitation Hospital, both in Warren, Ohio, on or around Sept. 20, which would result in 944 additional layoffs.
On a positive note, in Massachusetts, the health system reached agreements with three health systems to offload six of its hospitals. Steward landlord Medical Properties Trust also came to an agreement with the health system to take on operational expenses for its Master Lease I hospitals in Pennsylvania, Ohio Louisiana, Arkansas, Arizona, Texas and Florida.
"When you try to take on these hospital systems, it's almost as if you're just buying the structure, if that even, and reinventing the wheel from scratch," Trishul Kapoor, MD, an attending physician at Lehigh Valley Health Network and Jefferson Health in pain management, told Becker's.
Dr. Kapoor also pointed to "The Predictive Factors of Hospital Bankruptcy – An Exploratory Study," published in Healthcare, which found that while most bankruptcy filings across multiple industries have seen a 53% decrease since 2010, there has been a 305% increase in healthcare bankruptcy filings.
"The question remains, why? It's rather straight-forward," he said. "There are massive technology costs with limited interoperability, persistent decreases in governmental sponsored insurance reimbursement, rising overhead and staffing costs, growing demand from uninsured patients, and evolving competition."
While Steward works to place its remaining hospitals, attention has also turned to the health system's CEO, Ralph de la Torre, MD.
From trips to France to watch the equestrian 2024 Olympic events to owning two luxury yachts, Dr. de la Torre has been notably absent throughout Steward's bankruptcy proceedings.
Ahead of Dr. de la Torre's Sept. 12 subpoena hearing, Mr. Holstien said that optics do matter and that for any healthcare leader, it's important to always remain alert.
"We're always known to be in the public eye," he said. "We're generally the large player in our community. What you do in your private time on the weekends, sometimes that matters too, even though times may be good. You've got to be on guard and know that you do sign up for maintaining and holding the reputation of the institution that you're leading."
While Mr. Holstien acknowledged that Dr. de la Torre is trying to be cautious, other people's livelihoods and healthcare are at stake.
"Community, people, businesses, vendors; you really just have to come out and talk," he said. "You just have to put yourself out there and answer as many questions as transparently as you can."