The Biscayne Times reported in March about troubles at North Shore Medical Center when 152 employees were laid off with the closure of its behavioral health, labor and delivery, and neonatal units. It has since been revealed that the hospital’s owner, Steward Health Care System LLC, filed for bankruptcy on Monday.
The Dallas-based company released a statement May 6 claiming to have filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. It said it is finalizing terms with landlord Medical Properties Trust for “initial funding of $75 million and up to an additional $225 million upon the satisfaction of certain conditions ...”
The biggest private for-profit hospital chain in the country, Steward operates more than 30 hospitals across eight states, including five in South Florida. Those include North Shore Medical Center, Palmetto General Hospital, Coral Gables Hospital, Hialeah Hospital and Florida Medical Center.
(Courtesy of North Shore Medical Center Staff)
A total of 152 people, who feared being identified, were laid off from North Shore Medical Center in February when the behavioral health, labor and delivery, and neonatal units were closed.
Steward said its day-to-day operations will not be interrupted by the bankruptcy process.
“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,” according to the press release.
The company in part blamed a delay in the closing of the sale of its Stewardship Health business for the bankruptcy filing. Stewardship Health Inc. is the parent company of Stewardship Health Medical Group Inc., which employs clinicians across the country.
Earlier this year, Stewardship Health was in the process of being sold to UnitedHealth Group, the country’s largest health insurer based on revenue. UnitedHealth is facing its own troubles, however, as it’s currently embroiled in an investigation by the U.S. Department of Justice over antitrust concerns. The proposed deal drew criticism from lawmakers in Massachusetts, where Steward used to be headquartered.
Steward also faulted “insufficient reimbursement by government payors,” “skyrocketing labor costs, increased material and operational costs due to inflation, and the continued impacts of the COVID-19 pandemic.”
Steward-owned facility closures have been mounting over the past year, but the company’s long-standing financial troubles officially came to light earlier this year when it was revealed that Steward owed $50 million in rent to Medical Properties Trust as of January 2024. These woes, plus additional department closures in Steward-owned hospitals across the country, led employees in South Florida to accurately predict the looming bankruptcy long before it occurred.
The company filed for bankruptcy with between $1 billion and $10 billion in liabilities, according to its Chapter 11 petition.
Steward Health Care System has nearly 30,000 employees and provides care to more than 2 million patients annually.