STEWARD HEALTH CARE is changing the rules of hospital oversight in Massachusetts and there is little state regulators are doing about it.

In November, Steward announced it was closing the beleaguered Quincy Medical Center at the end of last year. The announcement seemed to fly in the face of both the contractual commitment Steward made when it acquired the hospital in 2011 and state regulations requiring 90-day notice of any hospital closing. Neither of those seemed to be an obstacle, however, and it was only after Quincy officials pushed the attorney general that the state’s top enforcer got involved.

“The enforcement on the part of the state is a farce,” says Quincy Mayor Thomas Koch. “Steward is so mighty and powerful nobody wants to take them on.”

Some of Steward’s action’s may have a political undercurrent to them. The announcement to close Quincy came the day after the election that turned Attorney General Martha Coakley into a lame duck and made outgoing Gov. Deval Patrick’s administration toothless. Some observers say the timing was not coincidental, whether it was to take advantage of the normal lax enforcement in transitions or wait to see what Gov. Charlie Baker or AG-elect Maura Healey would do.

“We were aware in advance of the announcement [of the agreement] but this was something worked out by AG Coakley and her team,” Healey spokesman David Guarino wrote in an email. “As Attorney General-elect, Maura is deeply respectful of the transition process and our team is working hard with Attorney General Coakley and her team to ensure a smooth transition. She has been and continues to be briefed by the AG and her office on ongoing issues and cases but it would be inappropriate for her to comment on specifics of any one case at this time.”

A spokesman for Coakley, who received nearly $17,000 in campaign donations from Steward executives during her failed gubernatorial run, declined to comment on questions regarding enforcement, pointing to the deal that was reached to keep the emergency services at the hospital in place for one to two years.

Coakley and Steward hammered out a deal this week that calls for Steward to maintain an emergency department at the now-shuttered Quincy hospital for at least a full year, and it can only close the department before the end of a second year if state health officials determine there is insufficient demand. There’s a $30,000-a-month penalty for bailing early. Steward is also required to pay for the relocation of the hospital’s veterans clinic Manet Community Health Center in North Quincy, and keep physicians’ and specialists’ offices in the city.

It wasn’t the first time Steward, a for-profit health system, has reneged on an agreement with the state and has, in essence, dared officials to try to prevent them from operating in their own best interests, contracts and regulations notwithstanding.

The commitments at Quincy that Steward walked away from seemed to be pretty black and white, despite everyone’s acknowledgement that the hospital was a money pit falling down on itself. In the original deal, Steward agreed, without any qualifications, to keep the hospital open for five years. After that period, the company agreed to continue operations at the hospital unless there were two consecutive years of “negative reporting operating margins.” Those two years, to no one’s surprise, came pretty quickly.

Steward officials, who have said the company invested $100 million in the hospital since the purchase, had appealed to the Department of Public Health to be allowed to close Quincy’s doors without the 90-day notice. The waiver was granted though it was predicated on Steward maintaining an emergency facility at the hospital to be run by Carney Hospital in Dorchester, part of the Steward network.

“We are committed to providing a convenient network of health care options to patients in Quincy, including a 24-hour emergency department, urgent care, and a network of primary care physicians and specialists,” Steward spokeswoman Brooke Thurston wrote in an email. “We will also continue to provide free transportation for patients, community benefits, and support the VA clinic transition to Manet.”

Thurston referred questions to the DPH about Steward’s intent to close before the 90-day notice period. Officials at the DPH declined to comment.

Steward had a similar deal when it purchased Morton Hospital in Taunton. About two years after the purchase, Steward shut down the hospital’s pediatric unit despite a 10-year “no-close” agreement that required Steward to “provide at least substantially the same services as currently provided by Morton Hospital.”

But, without clear enforcement authority for the state and no financial penalty, Steward went forward with the closure.

Steward isn’t telling anyone much about their investments. The company is currently facing $1,000-a-week fines from the state’s Center for Health Information and Analysis (CHIA) for refusing to turn over mandated financial records that the company had provided in previous years. The company continues to balk at providing the records, declaring them proprietary, and has not paid any of the fines, which can reach a maximum of $50,000.

“CHIA renewed negotiations with Steward just before the holidays,” Andrew Jackmauh, a spokesman for the agency wrote in an email. “We continue to hope to resolve this matter in a manner that ensures public access to information about one of the state’s largest hospital providers. However, if negotiations fail, CHIA is reserving its rights to impose the maximum penalty available. As of this week, the fines currently stand at $16,000, which will be assessed if we can’t come to a resolution.”

Thurston, the Steward spokeswoman, did not respond to questions about the CHIA fines.

None of the conditions imposed on Steward in the latest agreement, though, appear to have been a hard pill for the company to swallow. Koch said Steward’s agreement to maintain doctors’ presence in the city was self-serving, noting not only the relationship with Manet but also the opening of an office just off Furnace Brook Parkway by the Compass Medical Group, like Steward owned by the private equity firm Cerberus Capital Management. In addition, the planned veterans clinic will be housed at Manet Community Health Center, an affiliate of Steward. “This isn’t Steward doing Quincy a favor,” Koch says.

When Steward bought the bankrupt Quincy Medical Center in 2011, it was a deal that had many scratching their heads. Not only did Steward offer a $35 million net cash deal, nearly five times as much as the next – and only other – bidder. The for-profit health system committed to staying open for at least five years and only closing its doors in the next five years if certain negative conditions prevailed.

But there was nothing to force Steward to stand by its agreement because the deal it made in 2011 when it purchased the hospital contained no penalty for violating the contract. The deal was negotiated with the then-Trustees of Quincy Medical Center, which had purchased the hospital from the city in 1999, but after the deal, the Trustees ceased to exist and the attorney general’s office took over the enforcement of the agreement, such as it was.

“They made a lot of commitments and they’re walking from their commitments,” says Koch, who was measured in his initial reaction but said he’s irate at the way Steward has dealt with the city and the state. “Steward is a for-profit business that’s controlled by Wall Street that I don’t think gives two hoots about medical facilities. Their interest is in financials. Us watching out for our interests at the table on the ER kept it open for another year. If we weren’t pushing this, I have no doubt it would have been closed down.”

 

Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the...

One reply on “Steward rules”

  1. As a recent former nurse of the Quincy ER, I can tell you that Steward is not doing their part to make it easy to care for patients in the community. There are certain services necessary to run an ER and they are not providing them. They are making sure people will not want to come to our ER so that they may close that earlier than agreed as well. I would not be surprised if it closed in the next few months. I can say one thing for certain……..I would never work for them again.

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