The largest physician-led for-profit hospital network in the United States, Steward Health Care, has filed for Chapter 11 bankruptcy in the Southern District Court of Texas. The filing indicates that the network’s assets and liabilities fall between $1 billion and $10 billion, with a missed deadline to pay off at least $750 million in debt last month. Despite this, Steward reassured that there will be no interruptions in its day-to-day operations and that patient care will continue as usual.
The hospital network operates over 30 hospitals in various states and is now finalizing terms to receive debtor-in-possession financing from Medical Properties Trust, its hospital landlord. This financing includes an initial funding of $75 million, with the possibility of up to $225 million in additional funding under certain conditions. The delay in the sale of its physician group, Stewardship Health, to Optum was given as a reason for the bankruptcy filing by CEO Dr. Ralph de la Torre.
Several factors such as insufficient reimbursement from Medicare and Medicaid, as well as ongoing impacts from the Covid-19 pandemic, were cited as additional reasons for the filing. Steward Health remains committed to serving its patients and employees, with a focus on maintaining hospital operations during this challenging period. Medical Properties Trust saw a 10% drop in stock prices following the bankruptcy news.