Warren, Markey Urge Owners Of Steward’s Eight Massachusetts Hospitals to Offer Lease Concessions to Protect Hospitals’ Viability

July 03, 2024

Warren, Markey Urge Owners Of Steward's Eight Massachusetts Hospitals to Offer Lease Concessions to Protect Hospitals' Viability

Recent reporting suggests potential buyers are hesitant about paying "crazy rents" to MPT and MIP.

"We are writing to again ask that you offer long-term reductions in lease payments, early termination of leases, or other concessions to ensure that new operators can be found to keep Steward's Massachusetts hospitals open and viable."

Text of Letter (PDF)

Washington, D.C. - U.S. Senators Elizabeth Warren and Ed Markey (D-Mass.) wrote to Medical Properties Trust (MPT) and Macquarie Infrastructure Partners (MIP) ahead of the July 15, 2024 bid deadline for Steward Health Care's (Steward's) Massachusetts hospitals, urging them to offer lease concessions to ensure that new operators can be found to keep Steward's eight Massachusetts hospitals open and viable.

On May 6, 2024, Steward, one of the largest private, for-profit health systems in the nation, filed for bankruptcy. MPT and MIP played an important role in Steward's steep financial decline, in addition to years of mismanagement, private equity schemes, and executive profiteering, as highlighted in an April 2024 letter from Senators Warren and Markey to the companies. Shortly before Steward filed for bankruptcy, as Steward was exploring selling its hospitals as a way to resolve the fiscal crisis, MPT committed to ensuring the potential sale was "executed with as little disruption in patient care as possible." MIP committed to working in "good faith" to resolve the situation. However, recent reports indicate that MPT and MIP appear to be unwilling to make concessions in lease arrangements, which make up the vast majority of Steward's hospitals' debt and present an ongoing threat to the operations of the hospitals.

MPT initially paid $1.2 billion for the Steward hospitals and appears to have already received a substantial return on its investment - well over $1 billion - from selling half of its stake in the hospitals to MIP, in addition to rent and interest payments from Steward. Bankruptcy documents reveal that Steward pays approximately $341 million annually in lease payments to MPT and MIP together.

"The ability of these hospitals to emerge from bankruptcy under new ownership with stable finances will represent a significant public health victory for these communities, allowing their dedicated workers to continue to provide needed health care services," wrote the lawmakers.

The senators urged the companies to offer long-term reduction in lease payments, early termination of leases, or other concessions to ensure new operators can be found in a timely manner.

Senator Warren is one of the nation's leading bankruptcy experts, and has been leading congressional oversight of Steward's failures. Warren has repeatedly called out the harms of private equity ownership on health care costs and quality of care and has fought to prevent companies from taking advantage of the bankruptcy system:

• In June 2024, Senators Warren and Markey (D-Mass.) introduced the Corporate Crimes Against Health Care Act of 2024 to root out corporate greed and private equity abuse in the health care system
• In June 2024, Senators Warren, Brown (D-Ohio), and Markey (D-Mass.), called for the U.S. Trustee Program (USPT) to move to appoint a Chapter 11 trustee to run the company in place of Steward's current management as quickly as possible, and to monitor the hospitals' bankruptcy proceedings to protect patients and local communities.
• In May 2024, Senator Warren sent a letter to the U.S. Department of Health and Human Services and the U.S. Centers for Medicare & Medicaid Services, urging them to support communities and health care providers affected by the crisis caused by Steward's financial mismanagement.
• In April 2024, Senators Warren and Senator Markey (D-Mass.) sent a letter to six private credit funds that are holders of Steward's debt, asking them a series of questions about their loans and calling on them to offer loan modifications that could potentially help keep the hospitals afloat.
• In April 2024 Senators Warren and Markey called out Medical Properties Trust and Macquarie Infrastructure Partners for exploiting Steward Hospitals, and urged them to help keep the hospitals open.
• In April 2024, Senators Warren, Markey, and the rest of the MA delegation urged the FTC and DOJ to closely scrutinize UnitedHealth Group's proposed acquisition of Steward Health Care's physician group, Stewardship Health.
• In April 2024, Senator Warren delivered remarks at a Senate hearing in Boston titled, "When Health Care Becomes Wealth Care: How Corporate Greed Puts Patient Care and Health Workers at Risk," which centered on Steward Health Care's Massachusetts hospitals.
• In March 2024, Senator Warren released a statement about Steward's plan to sell its physician group Stewardship Health to UnitedHealth Group's subsidiary Optum.
• In March 2024, Senators Warren and Markey sent a letter to Steward CEO and Chairman Dr. Ralph de la Torre, calling on him to testify at a congressional hearing in Boston.
• In March 2024, Senators Warren and Markey sent a letter to Dr. de la Torre, blasting him for years of financial mismanagement, private equity schemes, and executive profiteering that have led to Steward Health Care's financial crisis.
• In February 2024, Senators Warren and Markey, along with all nine members of the Massachusetts congressional delegation, sent a letter to Cerberus seeking answers from the private equity firm for its role in creating the current financial challenges at Steward hospitals.
• In January 2024, Senator Warren released a statement about Steward's financial situation and allegations of patient neglect at Steward facilities.
• In January 2024, Senator Warren led the Massachusetts congressional delegation in a letter to the CEO of Steward Health Care pressing the company to brief them on Steward's financial position, the status of their Massachusetts facilities, and their plans to ensure the communities they serve are not abandoned.

###

Public link

Please use the above public link if you want to share this noodl on another website.