Steward Health Care, which teeters on a financial crisis that could put multiple Massachusetts hospitals in jeopardy, is a "house of cards and a charade," Gov. Maura Healey said on Monday, continuing to lash out at the for-profit health care system that is one of the state's largest employers.
A handful of executives that run the hospital system put patients in jeopardy, Healey said following a meeting with House Speaker Ron Mariano and Senate President Karen Spilka.
State officials only recently began to put the spotlight on Steward's leadership, after The Boston Globe reported about the company's severe financial stress in January. The governor, however, has reportedly been meeting with the hospital executives for months as nine hospitals in the state have been unable to pay their vendors or make rent. A Steward facility in Stoughton was already slated to close before the wider financial crisis became clear.
"This is something that was Steward's creation and making. The blame, the fault is with Steward and its management. It frankly disgusts me, as I've spoken to earlier, that a particular CEO came and chose to do what it appears he did in terms of how he ran operations and put patients and providers and our communities at risk," Healey said Monday, referring to Steward CEO Ralph de la Torre.
Healey spokesperson Karissa Hand said Friday that Steward should "complete an orderly transition out of Massachusetts."
The governor didn't say Monday whether Steward facilities could close as part of that transition, and speculation continues over how Steward's health care assets will fare in a hospital landscape that has undergone consolidation in recent years.
"We're focused on protecting our patients, our providers, those hospitals and the entire health care network and system in Massachusetts, and that work will continue," she said when asked about possible hospital closures.
Asked whether Steward executives could face criminal charges or criminal investigations, Mariano said, "There's always a chance."
Last week, Healey demanded that the company produce financial reports — which all hospitals by law are required to submit to regulators — by the close of business last Friday. She alleged that de la Torre's team has "not been forthcoming, truthful or responsive" about the apparent financial distress the hospitals are facing.
The administration now says the records Steward submitted are insufficient.
On Monday, the governor said that the hospital system did not produce records signed by an auditor because she suspects no auditor was willing to sign off on them.
She added that the lack of financial information leads to "continued engagement with other parties involved to understand and get to the bottom of the true state of play" of Steward's financial picture.
"Steward didn't produce audited financials because Steward doesn't have audited financials, which says something about and speaks to the very thing that we have complained about for a long time," she said.
A Steward spokesperson said the company provided audited financial statements through 2021.
"We do not yet have audited statements for 2022. However, as soon they are completed, we will turn them over to the state," the spokesperson said in a statement to the News Service Monday evening. "To date, we have given a voluminous amount of financial material and documentation, and we continue to work with state officials to provide information. We are unsure of the source of confusion, but we are intent on clearing it up and coming to resolution."
Mariano said state officials have been engaged in an "ongoing fight" for Steward to disclose its financial information since 2012. Spilka did not weigh in on the Steward crisis Monday.
"It's a semi-regulated industry in Massachusetts, yet they fought at every turn to release their financials to the point where they took it to court, lost, now they're appealing the decision. That's where it is," Mariano said. "So if anyone is feeling sorry for Steward right now, they're crazy, because Steward has practiced a game of hide the numbers, and they've been very successful at it."
Steward's ongoing refusal to supply documents is an "embarrassment," Mariano said.
"It's an embarrassment to the system, and look at what's happened to the patients. We have people in the emergency room without equipment," the speaker continued, as he blasted Steward's CEO. "That's the result of this lack of information that he's willing to give out."
Steward closed Quincy Medical Center in Mariano's district in 2014, due to multi-million-dollar losses. Mariano earlier this month offered his rebuke of de la Torre, telling the News Service, "I've been dealing with Ralph for a long time and I am suspect of everything he tells me."
Though state officials are only beginning to speak publicly about the hospital system's significant debt and financial challenges now, Steward has missed financial reporting requirements for years.
The health care group did not join other Massachusetts hospitals in reporting required financial information in 2015, when they posted a 6.54 percent margin across its eight hospitals despite negative total assets of more than $42 million.
"Regarding the characterization of this as a clerical error, we had multiple communications with several people at Steward, notifying them that their filings were past due and that failure to meet this statutory obligation would result in their being omitted from the report," a Center for Health Information and Analysis spokesperson said at the time.
In 2017, Steward sued the Center for Health Information and Analysis, alleging the agency demanded access to "confidential business information" with no promise that it would remain private. The case spent years in court, and in 2023, Superior Court Judge Catherine Ham ruled that Steward should be compelled to provide financial information to CHIA.
Steward appealed the decision, and the matter is still tied up in the Appeals Court with briefs due in the coming weeks.
A spokesperson for the hospital system says they have complied with previous state requests for information about its finances.
"In late 2023 and early 2024, Steward gave regulators in the Commonwealth the audited financial documentation they had requested and is continuing to cooperate closely," the spokesperson said last week.
Steward officials did not immediately return requests for comment on Monday in response to Healey's latest remarks.
In the past, the hospital system has argued that its struggles are fueled by structural problems and the concentration of resources in larger, academic medical centers. Community hospitals like the ones Steward operates typically serve a higher share of Medicare and Medicaid patients, and those public plans tend to reimburse at lower rates than private insurers.
The Massachusetts Health and Hospital Association is also looking for answers from Steward.
"Our MHA community of 60-plus hospitals is here to be a part of the solution, starting with a firm understanding of any Steward services that may be affected in the future and the exact capabilities of other providers to bridge the gap," MHA CEO Steve Walsh said in the group's newsletter Monday. "We hope to soon have a more concrete outlook on Steward’s operations and the role MHA members can play in the response. If this is indeed our next public health crisis, it will take everyone — hospitals, state leaders, insurers, organized labor, and beyond — working in lockstep to minimize the effect on patients and their dedicated care teams."
