A day after declaring bankruptcy, lawyers from Dallas-based Steward Health Care outlined a plan Tuesday in which the embattled system would sell off its sole Louisiana property, Glenwood Regional Medical Center in West Monroe, by the end of June.
The financial troubles of Steward, a for-profit, private equity-backed company that owns 31 hospitals in eight states, trickled down to Louisiana after it acquired Glenwood in 2017.
Over the last several months, state inspectors have documented repeated staffing and supply issues at the 278-bed facility, now restricted to 90 beds.
Lawmakers have called for the transfer of ownership of the facility and the Louisiana Department of Health has cited the hospital repeatedly for putting patients in “immediate jeopardy” of harm. The most recent citation involved a patient who died while waiting to be transferred, according to state officials. In a hearing at the Louisiana Legislature in April, former staff members described searching the hospital for basic, essential supplies mid-procedure and watching the repossession of everything from beds to coffee pots following nonpayment to vendors.
In the hearing and a press release following the filing, Steward representatives said they do not expect interruptions in day-to-day operations.
In a statement, CEO Ralph de la Torre said the bankruptcy filing allowed Steward to “be better positioned to … keep all of its hospitals open to treat patients, and ensure the continued care and service of our patients and our communities.”
The statement blamed insufficient reimbursements from Medicare and Medicaid alongside rising labor costs and financial stress from the pandemic as the driving reasons behind the bankruptcy.
The sale
Bids for Glenwood are due by June 25, with an auction on June 28, according to documents presented by Steward’s lawyers during a hearing Tuesday in federal bankruptcy court in Houston.
Marketing for Glenwood began in January and is being handled by the Cain Brothers, a New York-based investment banking firm.
In April, the interim CEO of Glenwood, Jonathan Turton, said the hospital had entered into “casual conversations” with other facilities, including nearby St. Francis Medical Center, owned by Franciscan Missionaries of Our Lady Health System, Willis Knighton Health in Shreveport, and Ochsner LSU Health in Shreveport, in the event that the hospital was shut down by the state due to the lack of staff and supplies.
Steward is $9 billion in debt, according to court documents, which it hopes to pay down with the sale of all 31 hospitals.
Steward has faced criticism from public officials, particularly in Massachusetts, where it owns nine hospitals. In Louisiana, lawmakers at an April 9 hearing blasted Glenwood’s parent company for what they said was negligence that injured patients.
Steward's landlord
Complicating the sale is Steward’s landlord, Medical Properties Trust, a Birmingham-based real estate investment trust that Steward sold its hospital buildings and land to in 2016 and 2017. Medical Properties Trust leases the hospitals, including Glenwood, back to Steward. That makes a sale more difficult, Rep. Michael Echols, R-Monroe, said. Steward has not maintained Glenwood, and the staff and services have been gutted, he said.
“The only thing that has value is the physical asset, which they don't own,” said Echols. “That's where I think Medical Properties Trust should be coming to the table with other stakeholders to look at either a sale or lease back.”
Steward may also retain some of its hospitals, according to hearing documents, which said Steward is marketing all hospitals while also “exploring a reorganization around a smaller footprint of hospitals.”
Echols said West Monroe residents don’t want Glenwood to be one of them. The hospital belongs in the hands of an operator that is "stable and reliable."
“Getting Steward out of the community as quickly as possible is what our constituents want,” he said.