![]() ![]() Steward promised to assume the Caritas pension liability, to keep all the hospitals open for at least five years, and to invest in the system. Caritas was in desperate financial straits at the time, struggling with an underfunded pension plan, heavy debt, and outdated facilities. In 2010, Caritas Christi, a nonprofit health care system affiliated with the Catholic Church, sold all of its assets to Steward, a for-profit entity backed by Cerberus. “We are proud of the three-year contract we recently ratified with Steward that ensures approximately 5,000 healthcare workers will continue to receive fair wages, affordable health insurance, and access to training and education opportunities.” Lee, Sr., executive vice president of 1199SEIU United Healthcare Workers East. “It provides the hospital system with flexibility to expand, improve its existing infrastructure, enhance technology, and continue investing in a highly skilled health care workforce,” says Tyrék D. The union that represents many of Steward’s employees is a fan of the health care system’s latest move. “I have no in-depth knowledge of this transaction and, while I’m familiar with management companies that manage hospitals by contract, I’ve never before heard of this particular variation,” she says. Lynn Nicholas, president and CEO of the Massachusetts Hospital Association (to which Steward doesn’t belong), begged off. “We have not seen other examples of systems selling off hospitals and decoupling ownership from operations,” says spokesman Andrew Jackmauh. The Center for Health Information and Analysis says it hasn’t reviewed Steward’s hospital sale. Attorney General Maura Healey’s office declined comment, as did the Health Policy Commission. Privately, many officials at rival health care companies scoff at Steward’s claims, but none will talk on the record. Rivals and regulators are not sure what to make of Steward shedding ownership of its hospitals. The company’s financial advisor says Steward is becoming a health care operating company whose principal assets are not hospital wings and emergency rooms but a quality brand and a proven business model. ![]() Steward officials say they have figured out the recipe for providing high quality health care at relatively low cost, a secret sauce that the company says will lead to profitable growth nationally. The real question now is what the deal means going forward for Steward and its more than 17,000 employees. ![]() The Steward press release says Medical Properties Trust is committed to participating in up to $1 billion of future Steward hospital acquisitions, with the Alabama company purchasing the facilities and Steward running them. At 10.1 percent, Steward’s first-year payment to Medical Properties Trust would total about $121 million.Īs part of the deal, Cerberus is purchasing $150 million of Medical Properties Trust stock, according to the SEC document. The initial yield on the leases and mortgages will be 10.1 percent, plus annual inflation escalators, according to a document filed with the Securities and Exchange Commission. In return for the $1.2 billion, Medical Properties Trust will collect lease and mortgage payments from Steward for the next 15 years, and possibly 25 years under extension options. The trust is paying out another $600 million and taking mortgages on Carney Hospital in Dorchester, Norwood Hospital in Norwood, Holy Family Hospital in Haverhill, and Nashoba Valley Medical Center in Ayer. Elizabeth’s Medical Center in Brighton, Good Samaritan Medical Center in Brockton, and Morton Hospital in Taunton. The Alabama company is paying $600 million for Saint Anne’s Hospital in Fall River, Holy Family Hospital in Methuen, St. But the remaining $1.2 billion is more of a business deal than an investment. Medical Properties Trust did invest $50 million in Steward, for a 4.9 percent stake in the company. Steward officials and the firm’s financial advisor indicate Cerberus is collecting more than $800 million from the deal and $400 million is being used to retire debt. The primary purpose of the transaction appears to be to pay off Cerberus Capital Management, a New York private equity firm that had bankrolled Steward for six years and needed cash to pay off its investors. Ralph de la Torre, the chairman and CEO of Steward Health Care.Ĭalling the infusion of cash an investment is a bit of a stretch. ![]()
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