Patients will suffer with bankrupt health care firm's closure of Massachusetts hospitals, staff say

Christina Hernon was saved by a doctor at a local hospital when she was 5

When Christina Hernon was 5, her throat swelled shut from an infection and her mother rushed her to a local Massachusetts hospital in the dead of night. She couldn't breathe, suffered a seizure and was near death when a doctor saved her by inserting a tube down her throat.

Hernon is now an emergency physician at one of two hospitals in the state that are due to close on Saturday. She and others among the 1,250 affected staff at Nashoba Valley Medical Center in Ayer and Carney Hospital in Boston believe that patients like she was will suffer and could even die as a result of the closures because they won't have time to make it to other hospitals farther away.

“I would consider it guaranteed that there will be some negative outcomes," Hernon said. “To add on an additional 20, 25 minutes, or over, of travel time is potentially the difference between life and death.”

Staff are furious because they say that behind the failure of the Dallas-based company that owns the hospitals, Steward Health Care, lies a story of alleged corporate greed involving one of their own.

Former Massachusetts heart surgeon Ralph de la Torre, who founded Steward and remains its chief executive, extracted more than $100 million from the company before it filed for bankruptcy in May, according to lawsuits and bankruptcy filings. The company had earlier cashed in by selling all its hospitals for $1.2 billion and then leasing them back from the new owners. The company described it as an “asset-light” model designed to prioritize patient care.

But a lawsuit filed by Aya Healthcare in Texas claims that during the COVID-19 pandemic, Steward elected to rain cash on its equity holders instead of paying bills and keeping critical hospitals operating at peak levels. Aya claims Steward owes it $45 million after not paying for hospital nurses it provided.

The lawsuit claims de la Torre used ill-gotten gains to fund a lavish lifestyle, including buying two luxury yachts worth more than $65 million. In recent weeks, as Hernon and other staff fought to keep their hospitals open, de la Torre and his family were on vacation at the Paris Olympics, watching the equestrian dressage events at the Palace at Versailles.

A spokesperson for de la Torre said that under the terms of the bankruptcy, he doesn’t have the authority to make decisions on which hospitals are sold or closed. He was “regrettably on a family vacation that was planned and paid for last year” when the decision to close the two Massachusetts hospitals was announced in late July, the spokesperson added.

“Of course this feels like a betrayal,” Hernon said. “I think it would feel pretty close to the same kind of a betrayal if he weren't a physician. But the fact that he is, it's just hard to understand how that came to be. Where the goals changed from protecting and caring for patients, and ensuring their health and wellness, to taking actions that are so destructive.”

At Nashoba Valley where Hernon works, signs urging action to keep the hospital open dot the parking lot, and pink hearts and writing on the emergency room window say “Save NVMC. Save lives!”

The carnage left behind by Steward's failure is widespread. After starting in Boston 14 years ago with funding from a private equity firm, Cerberus Capital Management, Steward expanded to operate 31 hospitals in eight states, employing about 30,000 people and serving more than 2 million patients each year. Cerberus cashed out in 2020, walking away with a profit of about $800 million.

Steward even dabbled internationally, including the small Mediterranean Sea nation of Malta. Steward claimed it achieved rapid success there after running three hospitals for the Maltese government. But the arrangement ended last year, and authorities in Malta have accused Steward of fraud and collusion. Steward said its business in the archipelago was “conducted professionally and to support our provision of services to the people of Malta.”

Steward's Chapter 11 bankruptcy filing in Texas details how the company ended up with $9.2 billion in debt and liabilities. De la Torre has previously argued his company purchased many struggling hospitals that may not have otherwise survived.

But staff don't buy it.

“With him getting away scot-free, being in France, doing whatever he needs to do, having his yachts, his planes, and not having to answer?” asked Michael Santos, who works security at the Nashoba Valley hospital. “What would happen if it was me or you?”

Santos has needed to rush his own daughter, who has severe asthma, to the hospital in the past and said it remains pivotal to the community.

“This closure, it's going to result in deaths,” Santos said.

About 50 miles (80 kilometers) southeast in one of Boston's most diverse neighborhoods sit the imposing Carney Hospital buildings. Emergency room nurse Mary Ann Rockett said she considers staff and patients to be like a family.

“We have patients here that when they walk in the door, we know their allergies, their meds, we know their medical history,” she said. “And in some instances, I can tell you what they're here for before they've filled out that spot in the questionnaire.”

Rockett said she also believes the closures will result in negative outcomes, including deaths.

“It's hard,” she said. “It's heartbreaking."

Neither Steward nor a patient-care ombudsman appointed for the bankruptcy process responded to questions about whether deaths or other negative outcomes were expected as a result of the two hospital closures.

This month, Massachusetts Gov. Maura Healey announced deals to sell four Steward hospitals to new owners and for the state to seize a fifth by using eminent domain before transferring ownership.

Healey said no buyers put in qualifying bids for the Carney or Nashoba Valley hospitals and the state couldn't be expected to run them, so they would need to close. She said the state had contributed $30 million to keep them open through the end of August.

“I’m pleased to say we’re closing the book on Steward once and for all in Massachusetts,” Healey said at a news conference announcing the deals. “Good riddance and goodbye.”

A spokesperson for the state's Department of Health said it had been working with other hospitals and health centers in affected regions to preserve access to essential medical services, help patients transition their care and connect staff with new employment opportunities. The department had also been in discussions with fire chiefs near the Nashoba Valley hospital to develop plans to maintain a strong emergency response system there, the spokesperson said.

Steward's bankruptcy is now being investigated by the U.S. Senate Committee on Health, Education, Labor and Pensions, and de la Torre has been issued a subpoena to testify on Sept. 12.

Saturday will mark the second closure of a Steward hospital that Rockett has endured. She worked at the nearby Quincy Medical Center when Steward shut down that 124-year-old hospital, citing operating losses. She said many of the neediest patients, the ones that fall through the cracks, also moved from Quincy to Carney, and she doesn't know where they will go next.

“There is no place in health care for profit," Rockett said. “We should be here for the patients.”