Steward Health Care, a financially troubled healthcare provider based in Texas, has filed for bankruptcy in a federal court in the state. The company stated that it does not anticipate any disruptions in its day-to-day operations as it goes through the bankruptcy process. Under Chapter 11 bankruptcy protection, Steward will maintain control of its business operations while reorganizing its finances with a court-approved plan. The company cited reasons such as skyrocketing labor costs, inflation, and insufficient government reimbursement for its financial instability. Steward has secured $75 million in initial funding to support the Chapter 11 reorganization.
Operating several hospitals in Massachusetts, Steward Health Care has faced criticism from the state’s congressional delegation, Governor Maura Healey’s administration, and others for failing to disclose the full extent of its financial troubles. The Massachusetts Nurses Association and healthcare workers union 1199SEIU expressed concerns about the potential impact of any hospital closures in the region, warning that it could have devastating consequences for residents.
Massachusetts’ Secretary of Health and Human Services, Kate Walsh, stated that the Healey administration has been preparing for Steward’s bankruptcy declaration. They are working with the company and potential partners to ensure an orderly transfer of ownership that protects access to care, jobs, and stabilizes the healthcare system. The unions are urging officials and industry leaders to take immediate action to preserve the facilities and transition to more stable ownership.
In addition to facing criticism from Massachusetts stakeholders, Steward also operates facilities in other states such as Florida where it faced similar issues with regulatory authorities over non-disclosure of financial troubles leading to penalties worth millions of dollars.