In letter to Steward employees, CEO de la Torre downplays bankruptcy proceedings - The Boston Globe

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"We have done everything in our power to operate successfully in a highly challenging health care environment," he wrote. "We've dealt with chronic government payor under-reimbursement rates, marked increases in Medicaid and behavioral health, and unprecedented increases in free care. This, coupled with sharp increases in labor costs, inflation, and the continued impacts of the COVID-19 pandemic have created an untenable situation for our organization."

The bankruptcy is designed to keep the hospitals "open, supplied, and operating" as the company sells its assets, wrote de la Torre, a former cardiac surgeon. This includes the acquisition of its physician network, Stewardship Health, by UnitedHealth's Optum unit. The decision to undergo bankruptcy proceedings, de la Torre said, was made "on the information that the approval of the sale of Stewardship will take longer than we had anticipated."

"To be very clear — all of Steward's hospitals, medical centers and physician's offices are open and continuing to serve patients and the broader community and our commitment to our employees will not change," de la Torre wrote. "It is incumbent on all of us to ensure that this process has no impact on the quality care our patients, their families, and our communities can continue to receive at our hospitals."

For "the vast majority" of the Texas-based company's employees, he added, "operations will either not be different or [will] improve."

"We know that the term 'bankruptcy' can raise some questions — and we fully expect that there will be some distracting local and media commentary as a result of this announcement — but this is an action that many organizations before Steward have undertaken, and one that many after Steward will undertake," he wrote.

In Massachusetts, Steward's hospitals include St. Elizabeth's Medical Center in Brighton, Carney Hospital in Dorchester, Good Samaritan in Brockton, Holy Family in Methuen and Haverhill, Morton Hospital in Taunton, Nashoba Valley in Ayer, and Saint Anne's in Fall River. It also runs Norwood Hospital, which has been closed since 2020 due to flooding.

In his letter, de la Torre noted that Steward has "remained committed to serving the socioeconomically vulnerable that many of our hospitals serve."

While lower insurer reimbursement rates have been a common refrain from Steward executives regarding its dire financial straits, the numbers tell a different story.

The Massachusetts Health Policy Commission, an independent state agency, conducted an analysis showing that Steward hospitals, on whole, receive payments on par with or higher than many other state hospital systems. However, this analysis did not include fees for Medicare and Medicaid, federal health insurance programs that typically pay out lower amounts and cover a majority of Steward's patients, according to the health system.

Just under 16,000 employees work for Steward in Massachusetts. In many cases, they have borne the brunt of Steward's financial crisis, with many choosing to leave as the system weathered supply and equipment shortages and service cuts.

Steward's liabilities and assets are both in the $1 to 10 billion range, according to its bankruptcy filings.

Read the full letter from de la Torre below: