“After years of gross profiteering and mismanagement, Steward’s latest plan raises even more serious questions about the future of Massachusetts’ health care system,” Sen. Elizabeth Warren said in a statement. “My top priority is to ensure that Steward Hospital in Massachusetts can continue to operate. However, Steward leadership lacks credibility and this sale will not benefit patients or healthcare providers. I am concerned that this does not guarantee the survival of these facilities.”
On Tuesday, Collaborative Care Holdings, a subsidiary of Optum, filed a notice with the Massachusetts Health Policy Commission regarding the sale. The documents filed with the state do not include a price tag, and Optum officials could not be reached for comment.
Steward did not respond to requests for comment.
David Seltz, the commission’s executive director, said the agency will examine the transaction’s impact on health care costs, quality, access and capital before the sale is finalized. The committee plans to assess the impact of the transaction within 30 days of receiving the necessary information, but may conduct a broader investigation. If the commission determines that the sale would worsen the quality of care or increase the cost of care, it could refer its findings to the Massachusetts Attorney General.
The deal could also face scrutiny from other state regulators and federal antitrust authorities.
“This is an important proposed change that involves two major health care providers in Massachusetts and nationally, and will have a significant impact on health care delivery and health care costs across Massachusetts,” Seltz said.
But Julie Pinkham, executive director of the Massachusetts Nurses Association, said state officials may not have enough power to block or influence the deal.
“While it is imperative that the Health Policy Commission thoroughly consider this sale and its federal implications, the key issue is whether the HPC or any other state agency will reject the proposal or impose any obligations. “This is a proposal to protect the public,” Pinkham said in a statement.
Under the proposed transaction, Optum would acquire Stewardship Health, a Steward affiliate that includes the company’s primary care physicians and other clinicians in nine states, and its physician contract network. It is unclear whether the sale of the hospital, which Steward is also seeking to sell, will change its value.
Massachusetts political and community leaders fear the deal could further weaken the state’s Steward Hospital, as former doctors may soon refer patients to other hospitals. He said he is doing so.
Boston City Councilwoman Liz Bredon, who represents the Brighton area of St. Elizabeth Hospital in Massachusetts, Steward’s flagship hospital, said she would like to study the Optum deal, but believes UnitedHealth would sacrifice important community hospitals. He said he was concerned that the bank was “picking and choosing” Steward’s more profitable assets. .
“We need high-quality hospitals that provide comprehensive care,” Bredon said. “But we don’t know if they want to go to the hospital.”
“If you don’t own the building, you’re paying a lot of rent,” she said, noting that the hospital building owes rent to an out-of-state landlord, Medical Properties Trust. said. Hospitals become less attractive to other prospective business owners.
Some feared Optum’s growing market power.
“Optum is particularly aggressive and has significantly expanded its presence in Massachusetts,” said John McDonough, a professor at Harvard’s T.H. Chan School of Public Health. “This is not a good sign of the direction Stewards and we are heading in. We need to hear from the state government what their strategy is and what they are trying to achieve.”
David E. Williams, president of Health Business Group, a management consulting firm in Boston, said Optum is focused on acquiring more profitable physician businesses rather than brick-and-mortar hospitals.
“They don’t want the facility,” Williams said. “They want more control over primary care and control over patient flow.”
The Stewardship Health acquisition could be challenged on antitrust grounds because Optum’s physician network, the nation’s largest employer of physicians, is also one of the largest in Massachusetts.
The Justice Department is investigating UnitedHealth’s insurance arm and its relationship with its physician network for possible anticompetitive conduct, The Wall Street Journal reported. report last month.
Optum has already expanded its presence in Massachusetts through two major acquisitions. In 2018, Optum acquired Reliant Medical Group, a nonprofit network of more than 500 healthcare providers, for $28 million and a deal to infuse more resources into the network. And in 2022, Optum paid $236 million to the nonprofit Atrius Health and its network of nearly 1,000 physicians and health care providers.
Nationwide, the division includes 90,000 physicians, a leading pharmacy benefit management company, surgery centers, and a health data business.
Optum’s Change Healthcare unit, which processes insurance payments at pharmacies and other health care providers, has also caused headaches in Massachusetts. A cyberattack last month left Change unable to process payments, forcing doctors and patients to fight for prescription coverage.
Steward Health was founded in 2010 as an initiative led by CEO Ralph de la Torre to transform a then-shaky Catholic hospital chain into a for-profit system backed by private equity firms. led. In the years since, Mr. de la Torre has struck a deal to sell Steward’s hospital building to Medical Properties Trust, freeing up capital to expand nationally, but the hospital has He was required to pay a large amount of rent.
He also continued his personal extravagance, moving Steward’s headquarters from Boston to Dallas, acquiring private equity investors, and purchasing a Dallas mansion, a superyacht, and a luxury sportfishing boat.
Steward’s financial crisis led to lawsuits from suppliers and losses on leased medical equipment. In October, a woman died after giving birth at St. Elizabeth Medical Center, where a critical device called an embolic coil had been seized by creditors.
Last month, Steward secured new financing from its landlord, MPT and other creditors as part of a plan that relies on asset sales, including a physician network. Other hospital operators in Massachusetts are also looking to take over Steward’s facilities. Gov. Maura Healey and other politicians called on Steward to leave the state.
Aaron Pressman can be reached at aaron.pressman@globe.com.follow him @Unpresman. Jessica Bartlett can be reached at jessica.bartlett@globe.com.follow her @JessBartlett. Robert Weisman can be reached at robert.weisman@globe.com.
