Steward/MPT Deal Does Not Include Local Hospitals – Yet

YOUNGSTOWN, Ohio – Although a tentative agreement between Steward Health Care System and Medical Properties Trust, the company that owns Steward’s real estate, does not include the three Ohio and Pennsylvania hospitals, there is hope it may once buyers are secured.

Ray Schrock, the attorney representing Steward, said while MPT has said the deals are not done in Ohio and Pennsylvania, “from [Steward’s] perspective our hope is all the hospitals remain open” adding that is the goal. His statement came in an update before Judge Christopher Lopez during a status hearing Friday afternoon in U.S. Bankruptcy Court in Houston.

Steward filed closure notices Aug. 21 for Trumbull Regional Medical Center in Warren and Hillside Rehabilitation Hospital in Howland with the goal of closing them by Sept. 20. It has not yet set a date to potentially close Sharon Regional Medical Center in Sharon, Pa.

Schrock said there were “good faith, hard fought negotiations” between Steward, MPT, the priority secured lenders and the unsecured creditors committee to reach the deal. Once finalized, the settlement would lead to MPT taking on operational costs of the non-Massachusetts hospitals covered in master lease I. Then MPT would work with interim operators to transition those hospitals to new ownership as quickly as possible.

With hopes of finalizing the settlement deal by Sept. 10, Schrock said MPT would be responsible for the operational costs on Sept. 11 and would begin collecting receivables for services rendered at that time. MPT will agree to waive other claims against Steward.

Western Reserve Health Education Inc., the nonprofit provider of graduate medical education at Trumbull and Hillside that is taking the lead for the Warren City Hospital Inc. group formed to save the hospital, stated in a court filing that it has submitted a proposal to buy Trumbull after securing $20.5 million in interim financing. Court documents indicated WRHE was awaiting a response from Steward.

WRHE, in a joint filing with Warren City Hospital Inc., the city of Warren and Trumbull County, is seeking another 15 days for submission of bids and an extension blocking closures of both hospitals from Sept. 20 until Nov. 20.

In an amended emergency objection, WRHE asked for a hearing no later than 10 a.m. on Sept. 3. On Friday, however, Lopez said he is not available for hearings on Sept. 3. WRHE argued that its accreditation is in jeopardy with the Accreditation Council for Graduate Medical Education, which plans to decide no later than Sept. 4.

As of this posting, no hearing date has been set on the joint objection to closure of the two hospitals in Trumbull County.

The commonwealth of Pennsylvania had been given a deadline of the close of business Friday to arrange $1.5 million in interim financing to prevent Steward from issuing a closure notice for Sharon Regional Medical Center. As of this posting, no related court filings were on the docket.

The Ohio Nurses Association president and executive director, Rick Lucas, called the potential agreement between Steward Health and MPT “a positive development… only a small step in the right direction” toward keeping Hillside and Trumbull Regional open.

“For these hospitals to remain viable and effectively serve the community, Steward Health must resume full operations immediately,” Lucas said, adding Hillside has seen a “staggering” reduction in patient numbers — dropping from 28 to an anticipated 11 by the end of the holiday weekend.

Lucas pointed out that Ohio Attorney General Dave Yost filed a response in support of extending the bid and closure deadlines, and he urged Yost to stay actively involved. Additionally, Lucas said the ONA continues to ask for Gov. Mike DeWine to take decisive actions.

In his filing, Yost cited the impact the closure of Trumbull Regional would have on the community, detailing the level III trauma center care available through Trumbull Regional. He noted 300,000 patients were seen last year at Trumbull hospital.

In 2023, Yost said $24.3 million in Ohio Medicaid dollars were spent at Trumbull with another $3.7 million at Hillside. He also noted the closures would create a delayed response time for patients and potentially overstretch resources at other medical facilities.

The ONA, which represents registered nurses at Hillside, is not the only labor union voicing concern. The Ohio Council 8 of the American Federation of State, County and Municipal Employees, as well as Service Employees Internation Union District 1199 — the two unions representing certain employees of Trumbull Medical and Hillside — filed in support of WRHE purchasing Trumbull. The unions said Steward is one of the largest employers in the area and the job losses would have a “detrimental effect on the area’s already challenged economy.”

Although Trumbull County is just outside of her district, state Rep. Lauren McNally (D-Youngstown) weighed in with her support for hospital workers, including union members, who held a rally Thursday. McNally pointed out the hospital closures would come only six years after Steward closed Northside Medical Center in Youngstown and would make it even more difficult on residents in the Mahoning Valley to assess health care.

During Friday’s hearing, Steward’s attorney also reported a purchase agreement was signed for six Massachusetts hospitals, which should go forward with a new operator the middle of next week.

Copyright 2024 The Business Journal, Youngstown, Ohio.