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Tentative deals reached to hand over 4 Steward hospitals to new owners, Mass. governor says

Chris Van Buskirk, Boston Herald on

Published in Business News

BOSTON — Tentative deals have been reached to hand over control of four hospitals run by Steward Health Care to new owners while Carney and Nashoba Valley remain on their paths to closure and the state plans to seize control of St. Elizabeth’s in Brighton, Gov. Maura Healey said Friday.

The “deals in principle” struck on the four hospitals pushed Massachusetts into the next phase of dealing with the fallout from Steward Health Care’s bankruptcy earlier this year. But it was unclear whether or by how much taxpayers would be on the hook for Healey’s hospital rescue plan.

Healey said new owners will take over operations at Saint Anne’s in Fall River, Good Samaritan Medical Center in Brockton, the Holy Family Hospital campuses in Methuen and Haverhill, and Morton Hospital in Taunton.

Carney and Nashoba Valley hospitals are still scheduled to close by Aug. 31, the governor said.

The Healey administration will forcibly purchase Saint Elizabeth’s Hospital from the lending group in control of the facility for $4.5 million, which the governor said is an “appropriate and fair market value” for the property.

Neither Healey nor her top lieutenants said where the money would be sourced from during a press conference at the State House. But a spokesperson for the Executive Office of Health and Human Services later said the money would “primarily” come from MassHealth’s budget.

Still, the first-term Democrat declared to reporters that Massachusetts was “closing the book on Steward once and for all.”

“Good riddance and goodbye,” she said. “That is a good thing. It’s a long time coming.”

A spokesperson for Steward Health Care said early Friday afternoon that the company did not yet have a response to the tentative deals.

Healey said the deals on the five facilities are largely being facilitated by a “fiscally responsible financing plan that includes cash advances, capital support, and maximizing federal matches.” The Healey administration previously agreed to advance $30 million to keep the hospitals operating.

Beacon Hill lawmakers have agreed to the deal, according to Healey, but specifics on whether the proposal would cost the state money or if officials were turning to other pools of cash were not immediately made available.

Health and Human Services Secretary Kate Walsh said officials were working with the new owners to make sure they had the funds available to meet their bids, increase staffing, stockpile supplies, and make investments “to make sure they’re safe.”

“That will take funds that we’re working with them to make sure they have,” Walsh said. “We’ve worked with (the Executive Office of Administration and Finance) and with our colleagues in the Legislature to identify those sources of funds and those funds will continue over the next three years.”

Spokespeople for House Speaker Ron Mariano and Senate President Karen Spilka did not immediately return requests for comment.

 

If the tentative deals hold — which Healey said could take anywhere from a few days to several weeks to finalize — Lawrence General Hospital will take over both campuses of Holy Family in Haverhill and Methuen while Rhode Island’s Lifespan Health System plans to assume operations of Morton and Saint Anne’s, according to Healey.

Boston Medical Center plans to run Good Samaritan Medical Center and St. Elizabeth’s “once the taking process is complete,” according to the Healey administration.

Healey said taking control of St. Elizabeth’s is “one of those things I can do.”

“We’re working that out right now with (the Executive Office of Administration and Finance),” she said when pressed on where her administration was going to find the $4.5 million to pay for the purchase of the medical facility.

A spokesperson for Apollo Global Management, the asset management firm that is in possession of the Brighton hospital, declined to comment on the planned seizure.

An unspecified hospital operator offered a “highly qualified bid” to run St. Elizabeth’s but “after the endless go-arounds, back and forth in negotiations,” Apollo “refused” to move forward, Healey alleged.

Healey said the state takeover of St. Elizabeth’s through the eminent domain process “will facilitate the transition … to a new owner, namely Boston Medical Center.”

“This will make sure that the hospital continues to stay open and operating in that community, and it means that with today’s news and the work that has been done, we have preserved and will keep open and operating five of the seven Steward hospitals that went bankrupt,” she said.

Dorchester residents this week expressed frustration that state officials were not moving to keep open Carney Hospital. Locals in Nashoba Valley soon followed suit when the fate of their local medical center was made clear.

Healey said no one stepped forward to buy the hospitals because Steward Health Care ran them “to the ground.”

“The difference here is we had five hospitals where hospital systems, as acquirers, came forward to take over operations. That unfortunately did not happen with Carney or Nashoba. If one were to miraculously appear, that would be another thing. But where we are today, this is all we can do,” she said.

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