Gov. Maura Healey intends to take control of St. Elizabeth’s Hospital in Brighton through an eminent domain process to keep it open and transition the facility to a new owner, she announced Friday.
St. Elizabeth’s is one of five Massachusetts hospitals up for sale by its bankrupt owner, Steward Health Care. Healey said agreements have been reached — but not yet finalized — to transfer the other four hospitals to new owners.
“Today, I’m pleased to say we’re closing the book on Steward once and for all in Massachusetts,” Healey said in a State House press conference. “Good riddance and goodbye. That is a good thing. It’s a long time coming. We’re here. It’s a new chapter starting today.”
She said an eminent domain taking was necessary for St. Elizabeth’s because the lender that owns the property, Apollo Global Management, “has refused to move” in “endless” rounds of negotiations, despite a bid from a qualified hospital operator.
Under the deals that Healey said will be finalized “in short order,” Boston Medical Center will eventually take over both St. Elizabeth’s and Brockton’s Good Samaritan Hospital. Lawrence General Hospital will purchase the Haverhill and Methuen campuses of Holy Family Hospital, and Lifespan will assume operations at Morton Hospital in Taunton and St. Anne’s in Fall River.
State Sen. Marc Pacheco of Taunton told GBH News that he was relieved to see Lifespan, a not-for-profit health system based in Rhode Island, emerge as the successful bidder for the southeastern Massachusetts hospitals. He called it “good news” for the region.
“It took a lot of work behind the scenes, with bankruptcy court, with finance entities, you name it,” Pacheco said after Healey’s announcement. “It was quite significant in terms of getting all of these pieces of the puzzle put together so that they can actually be in a position to announce this to the general public.”
Healey said she has been working with legislative leaders on a ”fiscally responsible financing plan“ to support the deals, but did not put a full dollar figure on it during her Friday afternoon press conference.
The agreements will not affect the two hospitals that Steward plans to close, Nashoba Valley Medical Center in Ayer and Carney Hospital in Dorchester. Healey said eminent domain was not an option for keeping those hospitals running because no qualified bidders came forward during the bankruptcy process seeking to acquire them.
Healey’s health and human services secretary, Kate Walsh, the former CEO of Boston Medical Center, attributed the lack of bids to “chronic underinvestment” in the facilities by Steward.
“The state cannot run a hospital,” Healey said. “Hospital systems have to run a hospital.”
To kick off the eminent domain process for St. Elizabeth’s, Healey said she’ll send a $4.5 million offer letter Friday to Apollo, the property owner. She said that amount represents a fair and appropriate market value.
Boston City Councilor Liz Breadon, who represents Brighton, said a state seizure of St. Elizabeth’s was “the only path forward” to facilitate the transfer to BMC and keep the hospital open.
“This decision protects the healthcare and wellbeing of the thousands of residents who rely on St. Elizabeth’s, and the hard-working hospital staff and medical professionals,” Breadon said in a statement.
The health care workers union 1199SEIU said the move represents “the exact kind of aggressive action” its members have been demanding from the state. Tim Foley, the union’s executive vice president, said the patients and workers at Carney and Nashoba Valley deserve the “same level of uncompromising commitment.”
“Thanks to Governor Healey and her administration, six Steward hospitals will be saved,” Foley said. “Steward’s investors spent years draining resources from these hospitals to fuel their profits, and they own the blame and responsibility for this crisis. We will not rest until they are held fully accountable for their misconduct and greed.”
Healey’s office announced the moves as a federal bankruptcy judge in Texas was holding a hearing into the proposed sale of Steward’s physician group to Rural Healthcare Group, a subsidiary of a New York private equity firm.
During that hearing, a lawyer representing Steward said the company was “very, very close” on deals for at least five of the six Massachusetts hospital campuses it plans to sell, but did not specify which five.
Attorney Ray Schrock said Steward is “hopeful that we could close out the remaining issues between — on the one hand, the buyers, on the second, between the commonwealth of Massachusetts and our stakeholders — as we move forward toward what we hope is a signing of asset-purchase agreements on hopefully all of the six hospitals that we’re trying to sell.”
