Steward Health Care Systems

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Report: In Mass. Health Care, System Skewed So Rich Get Richer

A report released today by the Healthcare Equality and Affordability League (H.E.A.L.) — a partnership between the for-profit Steward Health Care System and the union, 1199 SEIU United Healthcare Workers East — finds that disparities in hospital costs and financing across the state are driving “a vicious cycle” of inequality in health care.

The result, according to this analysis, is that medical care is becoming less affordable for lower-and middle-income families in Massachusetts, and the disparities in hospital financing are “compromising the viability of community hospitals.”

The group is calling for new, and what they call more “fair” reimbursement rates so that poorer, community hospitals (with a greater proportion of Medicare and Medicaid patients compared to the higher-cost Boston teaching hospitals) can continue to serve the lower-income patients, among other financial recommendations.

David Williams, president of the Boston consulting firm Health Business Group, who was paid by H.E.A.L to research and co-author the report, says: “What hasn’t been demonstrated before is what impact these financing disparities have on communities and community hospitals.”

He notes: “The hospitals that have the highest percentage of publicly funded patients, they get paid less, but in addition to that, those hospitals also get the lowest commercial rates — because they’re not in as strong a position to negotiate — so that means that they’re doubly disadvantaged…it means that the hospitals serving middle-class and lower income communities don’t have the resources to compete effectively with those hospitals that get higher reimbursements.”

Clearly, the group’s recommendations would benefit the Steward-owned hospitals, Williams acknowledges, but, he adds: “it would also help with the state’s overall approach to cost containment.

I asked Nancy Turnbull, an associate dean at the Harvard School of Public Health, to take a look at the report and here’s what she had to say:

…This report looks to be raising critical issues regarding payment disparities. We’ve known for years, from the work of the [Attorney General], [Center for Health Information and Analysis] and others that these disparities exist and are, in many cases, getting worse. So far, we’ve done little to address them, and the effect these disparities have on lower paid providers and the patients for whom they care. However, I don’t think the solution is, in most cases, to just increase the rates of payment for poorly paid providers, although that is a needed action for some. We also need to talk about reallocation of existing payments, and about costs. I am supportive, to some extent, of giving consumers reasonable financial incentives, based on their income, to use lower cost providers—although lower paid is not the same as lower cost–but we also need approaches that are systemic. Consumers in tiered and high deductible health plans aren’t going to solve this problem without tough action by state government and other payers, including, in my opinion some regulation of rates of payment. And most tiered networks available so far are regressive — they impose higher costs on lower-and moderate-income people. They address one form of inequality by creating another.

Among the findings, according to the H.E.A.L press release:

“The rich get richer as highest cost hospitals attract a greater proportion of patients with commercial insurance, which have higher reimbursement rates than Medicare and Medicaid.”

(H.E.A.L report)

(H.E.A.L report)

–“Patient migration for routine care from community hospitals to high cost Boston teaching hospitals increases total medical costs and contributes to higher premiums for all individuals and families with commercial insurance (non-Medicare nor Medicaid). Additionally, low-income patients, forced to travel greater distances to receive routine care are more likely to forgo treatment until conditions become acute and require more expensive interventions.”  Continue reading

Watching For Answers As Steward Expands

(Source: Mass. Attorney General's report)

(Source: Mass. Attorney General’s report)

Attorney General Martha Coakley issued an initial report last week on her office’s monitoring of Steward Health Care System, the for-profit chain that has quickly expanded recently to become the state’s second-biggest care provider — and says it can offer high-quality care at lower cost.

That report has fed into two freshly updated overviews of Steward and its place in the metamorphosing Massachusetts health care system:

From Rob Weisman, in Sunday’s Boston Globe: Steward reshapes Mass. health care business, with a sub-head: For-profit hospital chain is growing fast; cutting costs with tough management, innovation.

He writes that thus far, Steward has “lost tens of millions of dollars. But it has also assembled a formidable network of 11 hospitals with nearly 2,100 beds, second only to the giant Partners HealthCare System. Steward says it is forging a lower-cost ‘community care’ model, drawing patients from expensive Boston teaching hospitals. It is forcing every other player in the medical business to reassess its own strategy.”

Will Steward reach its goals and make medical care cheaper while making a profit for Steward? That, Rob writes, “remains an open question.”

And Paul Levy, former chief of Beth Israel Deaconess Medical Center, on his Not Running A Hospital blog here, focuses in part on whether Steward will achieve the operating efficiencies it seeks. He writes of Steward: Continue reading

Breaking: Steward Confirms Bill Walczak Out At Carney

Bill Walczak

WBUR’s Martha Bebinger reports:

Bill Walczak is leaving Carney Hospital after just over year as president of the struggling Dorchester institution. A spokesman for Steward Health Care Systems, which owns Carney, would not comment and Walczak has not returned calls. Walczak came to Carney from Codman Square Health Center, where he had been for 36 years.

Bill is best known for running Codman Square Health Center in Dorchester for 36 years and helping to turn it into one of the most innovative such centers in the country. He left early last year to become president of Carney and here’s what we wrote at the time:

Bill says nothing could have dragged him away from Codman Square except the chance to help another Dorchester institution, and that he plans to reconnect the Carney to the community health centers in Dorchester. He wants the Carney to “reestablish itself in the Dorchester community as the essential community institution it is.”

Stay tuned not just tonight but in coming weeks. How will Bill Walczak try to turn the Carney around???

Now I’m staying tuned in a different way: What will Bill Walczak say about his time at Carney and what caused it to end? He’s known for being outspoken; what will he say about Steward, which of late has been buying up hospitals in Massachusetts and Rhode Island? The Dorchester Reporter has the story here, but no additional answers at this point about what happened.

Ralph De La Torre’s ‘Moxie’ And The Quest For Revamped Health Care

No one asked, but if I were Ralph de la Torre, I’d give my PR people a generous bonus and an extra day off.

This profile of de la Torre, chairman and CEO of Boston-based Steward Health Care System LLC, in The Deal magazine is the kind of story executives dream about. It’s called: “How Ralph de la Torre plans to save healthcare and make a fortune for Cerberus.”

Here’s a taste:

Ralph de la Torre, 45, rocketed to the top of American medicine in 2004 when he became chief of cardiac surgery at Harvard University’s Beth Israel Deaconess Medical Center and, three years later, founded the hospital’s CardioVascular Institute. He then made a dramatic career change, giving up his medical license to run a group of Catholic hospitals outside Boston that were lurching toward bankruptcy. Two years later he persuaded New York-based private equity giant Cerberus Capital Management LP to buy the group. Now he’s on the hunt for other troubled community hospitals.

In fact, the surgeon-turned-administrator-turned-investor now believes he can transform healthcare in America, too, as he wrote President Obama in 2009, not simply “tweak elements of the system” but “overhaul the entire model.” And he plans to do it by using private equity money…De la Torre has never exactly been short on moxie.


(Here’s de la Torre speaking at an Associated Industries of Massachusetts forum in September on the launch of Steward’s new health plan.)
Continue reading

Nurses Vs. Steward: Walk-Out At Quincy Medical Center Meeting

Sounds like a particularly stormy night in Quincy last night. The Patriot Ledger’s Jack Encarnacao reports here that a hearing at Quincy High School on Steward Healthcare System’s plan to buy the foundering Quincy Medical Center turned into a knock-down-drag-out (well, not literally) fight over nurses’ pensions, and dozens of nurses walked out. He writes:

QUINCY — A public hearing on the proposed sale of Quincy Medical Center became a battleground in a labor fight between the prospective owner and nurses from other hospitals it has bought.
Dozens of members of the Massachusetts Nurses Association walked out of Tuesday night’s hearing at Quincy High School as a lawyer for Steward Health Care accused the union of distorting facts about the dispute over a pension plan.
“They are willing to let these important community hospitals potentially close, taking with them thousands of jobs and creating economic chaos, all because they want more than ever and don’t care who is hurt in the process,” Joseph Maher, Steward’s general counsel, said of the union.
The Massachusetts Nurses Association asked the state attorney general to delay approvals of Steward’s purchase of Quincy Medical Center and Morton Hospital in Taunton until the issue is resolved. The nurses submitted signed petitions Tuesday to Steward CEO Ralph de la Torre calling for a resolution to the dispute.

Will the nurses’ complaints slow the sale of Quincy Medical Center to Steward? Not judging by how Jack’s story ends:

While some speakers at Tuesday’s hearing expressed concern about the labor dispute, all stated support for Steward’s $34 million purchase of the financially ailing Quincy Medical Center.
“Quincy needs a hospital,” said state Rep. Ronald Mariano of Quincy. “I’m more concerned about what happens if we don’t make this deal.”

Steward Continues Buying Spree; Globe Reports Deal for Lowell Hospital


The Boston Globe’s Rob Weisman reports here:

Steward Health Care System this morning unveiled its second deal in the past four days to acquire an eastern Massachusetts hospital, saying it has a letter of intent to buy Saints Medical Center in Lowell.

Saints is a 157-bed Catholic community hospital formed through the merger of two separate local hospitals in the late 1990s. Under the letter of intent, it will retain its Catholic identity as it affiliates with Steward, which runs six other Catholic hospitals in the state, including St. Elizabeth’s Medical Center and Carney Hospital in Boston.

Financial terms will be negotiated in an asset purchase agreement, which is expected to take another 30 to 60 days.

For more background and a helpful overview of what it may mean as more hospitals shift from non-profit to for-profit status, see last week’s Globe story on the topic here.

Caritas Owners Keep On Buying

The new owners of the Caritas Christs hospitals, continue their buying spree

Continuing their local acquisition spree, Cerberus Capital Management, the private equity firm that last month bought the six formerly non-profit Caritas Christi hospitals (and formed the company Steward Health Care Systems LLC to run the chain) will purchase two more Massachusetts hospitals, The Boston Globe reports.

The 124-bed Merrimack Valley Hospital in Haverhill and 57-bed Nashoba Valley Medical Center in Ayer — both owned by Essent Healthcare of Nashville — will be sold to Steward for a price the parties, both private businesses, aren’t disclosing.