YOUNGSTOWN, Ohio – Once again, an essential provider of health care in the Mahoning and Shenango valleys is in dire financial straits.
The Chapter 11 bankruptcy filing May 6 by Dallas-based Steward Health Care was presaged by disclosures that it owed $50 million in rent to Medical Properties Trust Inc. and that numerous vendors had filed civil claims in several states.
Steward said it had no alternative given “insufficient reimbursement by government payors as a result of decreasing reimbursement rates … skyrocketing labor costs, increased material and operational costs due to inflation, and the continued impacts of the Covid 19 pandemic.”
At the May 7 first-day hearing in U.S. Bankruptcy Court in Texas, Steward – which reports $9 billion in debt and $6 billion in annual revenue – said it planned to sell all 31 hospitals it operates. Among them are three in this area – Trumbull Regional Medical Center in Warren, Hillside Rehabilitation Hospital in Howland Township and Sharon Regional Medical Center in Sharon, Pa.
The situation is unpleasantly familiar for our area, particularly for those who depend on Steward for health care services and the thousands of physicians, nurses, administrators and support staff the company employs. It was slightly more than 15 years ago that Forum Health – which operated Trumbull Memorial, Hillside and the now-shuttered Northside Medical Center in Youngstown – filed Chapter 11.
In 2010, Tennessee-based Community Health Systems purchased Forum’s assets, including the three hospitals, several outpatient clinics and ancillary facilities, and rebranded them as ValleyCare Health System of Ohio. CHS added Sharon Regional a few years later. In 2017, Steward purchased the former Forum assets and Sharon Regional from CHS. It closed Northside the following year.
An auction has been set for June 28 for Steward’s assets outside Florida, July 30 for those in Florida.
“Our goal remains that there are zero hospitals closed on our watch,” Steward attorney Ray Schrock said. “There’s going to be a change in ownership in many hospitals – we recognize that. But we don’t want to see any of these communities fail to be served.”
Agreed. Hopefully, the region’s improving economic prospects will encourage a well-financed buyer.