BOSTON - Steward Health Care, facing bankruptcy, has agreed to sell its physician network, Stewardship Health, to the Rural Healthcare Group, which is backed by private equity firm Kinderhook Industries. The deal, priced at $245 million, is pending approval from bankruptcy court and regulatory agencies.
This sale marks a significant shift for Steward, which filed for bankruptcy in May, leading to the consolidation of its nine hospitals and the search for viable buyers. The physician network, comprising over 3,250 providers, serves around 800,000 patients nationwide.
Steward's statement confirms the network will continue operation under its current name and management, ensuring existing patients can access services without interruption. The Rural Healthcare Group emphasizes its commitment to improving stewardship resources and infrastructure.
Previously, Steward attempted to sell its physician network to Optum, part of UnitedHealth Group, but negotiations fell through earlier this year. According to court filings, the collapse of this earlier agreement prompted Steward to secure alternative offers from other entities
Rural Healthcare Group's CEO, Benson Sloan, expressed optimism about the deal, citing their experience with transitioning clinics from health system ownership to independent operation. He assured stakeholders of plans to maintain high-quality care for patients through significant investments.
Critics have raised concerns about the influence of private equity on healthcare outcomes, with Massachusetts Senator Elizabeth Warren highlighting the risks associated with such ownership structures. The potential for local healthcare accessibility to diminish under private equity management remains hotly contested.
Steward Health Care’s bankruptcy led to the planned closures of two facilities, Carney Hospital and Nashoba Valley Medical Center, amid widespread community pushback. The company is now focused on soliciting bids for six other hospitals, including prominent names like Good Samaritan Medical Center and Morton Hospital.
While the upcoming court hearing will evaluate the sale of Stewardship Health, it remains under scrutiny from both state and federal regulators. Lookouts have suggested these proceedings are critical to safeguarding patient access and upholding healthcare standards.
Massachusetts Governor Maura Healey's administration also plans to oversee the transitional phase to protect community healthcare resources effectively. The Health Policy Commission will evaluate the agreement and its impacts on the state’s hospital system.
This movement of funds and resources is part of Steward's broader strategy to untangle itself from mounting debts estimated at around $9.2 billion. With the physician network now on track to transition, there are hopes within the healthcare community for stability amid the turmoil.
Child health advocates hope the proceeding does not lead to cutbacks affecting childcare services within their healthcare framework. The deal’s completion will also have reverberations throughout their operational network, signaling what future care might look like across their affiliated facilities.
The complexity of this financial undertaking reflects broader trends within the U.S. healthcare system, where private equity firms increasingly invest, often stirring debate on quality versus cost. With this transition, stakeholders will watch closely to see how stewardship might evolve under new management.
Despite the uncertain atmosphere surrounding the bankruptcy proceedings, the terms of the agreement shine some light on potential recovery paths for Steward's future operations. Efforts to separate the physician groups from the hospital system could provide much-needed resilience.
Many community members and advocate groups are now left anxiously awaiting the judge's final ruling on the sale and the impending restructuring of Steward Health Care. Their fates and the future of local healthcare services rest on the decisions made in these courtrooms.