Workers describe unpaid bills, delayed care and anxiety at Mass. Steward hospitals

Nearly four months after Steward Health Care's financial problems erupted publicly, casting a cloud over its Massachusetts operations, state officials appear increasingly worried about the company's future.

In recent weeks, they've ramped up efforts to prepare for changes at Steward facilities, including a potential bankruptcy. Some elected officials have questioned whether Steward executives enriched themselves and their investors while neglecting hospitals that serve many elderly and low-income patients. Steward executives deny this.

Yet some long-time Steward workers say the company's challenges have been evident for years. Many of its Massachusetts hospitals have experienced staff reductions over the past two years, according to state data. Interviews with several current employees — and complaints filed with the state Department of Public Health — paint a picture of flagging investment in facilities, administrative dysfunction and, in one case, an alleged rat infestation.

Dallas-based Steward continues to employ more than 16,000 people across its Massachusetts facilities, according to unions representing Steward workers, who say they are providing medical care amid a fog of uncertainty about the future. Some employees say they are doing their best despite challenging circumstances, hoping new operators will take over — and soon.

At Carney Hospital in Dorchester, an anonymous staff member filed a complaint last August alleging problems such as "unpaid bills, unavailability of supplies, surgical cancellations and rat and fly problems." It was among 11 complaints about Carney filed with the state over the past year, which WBUR obtained through a public records request.

Carney is one of seven active hospitals in eastern Massachusetts operated by Steward, one of the nation's largest private, for-profit hospital networks. (An eighth facility, Norwood Hospital, closed because of flooding in 2020. The company recently shuttered New England Sinai Hospital in Stoughton.)

Most of Steward's Massachusetts patients are covered by Medicaid or Medicare, the government insurance programs that serve mainly low-income, elderly or disabled patients. The company has said low reimbursement rates for these programs are a big reason behind its financial difficulties. There are other hospitals that serve similar patient populations, but none appear to be in as dire straits as Steward.

The anonymous employee at Carney was not the only one to mention rats. A complaint the same month from the Massachusetts Nurses Association, the union representing Steward nurses, also reported an alleged rodent infestation at the facility, which operated 91 inpatient beds and provided inpatient and outpatient services for some 10,000 patients last year, according to the state's Center for Health Information and Analysis.

State records indicate both complaints were "reviewed and filed." State health officials said the local board of health completed an investigation. The nurses' union said the hospital brought in exterminators and the issue was resolved.

Another complaint, also filed in August, said a patient attending a routine medical appointment at Carney slipped on a hospital floor and was transported to another hospital, where the patient died. State health officials said that complaint was referred to the hospital’s accrediting organization, The Joint Commission, for further review and investigation.

It remains unclear what led to the patient's fall. In a separate incident in 2021, a state investigation found understaffing at Carney Hospital's emergency room and a lack of employee training contributed to a patient death, according to The Wall Street Journal. At the time, the hospital said it hired more staff and fixed the problems highlighted by the probe.

Steward declined to comment for this story. Carney hospital administrators did not respond to efforts to contact them.

Carney was once a very different hospital from what it is today, according to Carl Odom, a cardiopulmonary technician who has worked there for more than four decades. It was founded in 1863 as a Catholic hospital and remained true to its origins for much of its history. Odom remembers when the hospital was run by nuns from the Daughters of Charity order.

"They might have been wearing habits and things, but they should have been wearing Brooks Brothers suits," Odom said. "They were sharp."

But a changing health care industry required them to adapt. By 2010, Carney had become part of Caritas Christi Health Care, a Catholic hospital chain. It had accumulated debt, developed a significant pension shortfall and needed millions of dollars in renovations. Steward stepped in.

Steward was created when the private equity firm Cerberus Capital Management acquired Caritas Christi. The deal came with high hopes. Led by former cardiac surgeon and Caritas Christi CEO Ralph de la Torre, Steward leaders had ambitions to strengthen the chain's six hospitals, provide quality health care in underserved communities and save thousands of unfunded pensions for former Caritas workers.

"They were our only rescue," Odom said.

At first, Odom remembers an infusion of money and an agreement to unionize workers with the Service Employees International Union 1199.

"Initially it was very good," Odom said." The people [Steward] brought in to support us, the hospitals, we could call them and even the vice president would be here."

But after just a few years, Odom, who is a union steward, said the atmosphere began to change. It became more "corporate," with more pushback from management during contract negotiations. The hospital's workforce was reduced, he said, and large equipment purchases were delayed. Odom said clinicians felt pressure to see more patients.

"People started saying they couldn't get supplies anymore because there was a credit hold."

Carl Odom

In 2016, Steward reached a deal to sell its hospital real estate to Medical Properties Trust, a real estate investment trust. Steward rented back the facilities and the deal paved the way for a massive expansion into other states. The company soon moved its headquarters from Massachusetts to Texas.

After that, Odom said he noticed more concerning signs. When he tried to get supplies for his lab, long-time vendors had stopped extending lines of credit.

"People started saying they couldn't get supplies anymore because there was a credit hold," Odom said. "So, we had to find new vendors — maybe small companies who couldn't give us a full order but would at least give us some supplies.

"After a few months though, even the little companies would say no."

Despite this, Odom said he never witnessed anything that posed a risk to patients.

North of Boston, at another Steward hospital, employees described a similar pattern of early investment followed by years of declines.

Holy Family operates 262 beds at facilities in Methuen and Haverhill. The hospital provides inpatient and outpatient services to nearly 200,000 people a year, according to the state Center for Health Information and Analysis. It offers cancer care and psychiatric beds, among other care, and its emergency rooms are always busy, according to people who work there.

When Steward first took over more than a decade ago, there were improvements, some employees said. Steward merged the two facilities, which had been separate hospitals, and appeared committed to building up the hospital, the employees said. But after a few years, doctors described an increasingly complex corporate chain of command that appeared focused elsewhere.

"I would say that years ago, you began to see the shift in priorities," said Dr. Paula Muto, a general and vascular surgeon in North Andover who is affiliated with Holy Family. "It started off with money coming into Holy Family and we were building and building, and then [Steward] got bigger and bigger buying up more practices and expanding across the country."

By December of last year, Dr. Vartan Yeghiazarians, president of the medical staff at Holy Family Hospital, said serious problems were evident: vendors weren't being paid, and equipment became harder to get, causing medical procedures to be delayed or cancelled.

"I think that's when we started noticing that things were really off," Yeghiazarians said.

When Steward publicly acknowledged its financial problems in January, Yeghiazarians reached out to other doctors to discuss the hospital's future.

"We have a big medical staff, about 50 doctors," Yehiazarians said. "So they all showed up for a meeting at my house."

The doctors now meet regularly, in-person and online. They call their group Merrimack Valley Community Doctors. They've met with local, state and federal officials about what might happen at Holy Family, as state officials repeatedly call for Steward to leave the state. They've also been in touch with colleagues at nearby Lawrence General Hospital, to prepare for any potential loss of health care services.

"I think our collaboration shows our dedication to the community and the patients," Yeghiazarians said. "I believe that with a new model, whatever that may be, I think things will change very quickly, swiftly and for the better.  We're going to be in a much better place six months from today."

A significant concern for Steward Hospitals now is retaining staff and patients. Some workers have left Holy Family because of the uncertainty surrounding Steward's future, according to Yeghiazarians, and patients are worried too.

"A lot of people in the community were reading about what was happening, and they were not happy," Yeghiazarians said. "They started migrating out and went other places for their care. So, we're going to have to regain the trust of patients."

Yeghiazarians said he's confident the hospital will navigate these headwinds because of its long history in the community.

At Carney Hospital, the last few months have also been difficult. Like many health care facilities, Odom said Carney has a shortage of workers. And the news of Steward's financial problems may be making patients reluctant to come. In recent weeks, several non-Steward hospital leaders have publicly reported increased patient numbers which they attribute to some people choosing to avoid Steward facilities.

In February, monitors from the state Department of Public Health began visiting Steward hospitals daily. Odom said conditions have improved as a result, but staff morale remains low. Odom described staff members as "numb," but hopeful the state, or another operator, can keep the hospital open.

"This is a lower income community and are you going to take away another thing that the community needs like health care?" Odom asked. "People already wait months to see a doctor, and it's only going to get worse if you take away this place."

A coalition of labor groups, health care leaders and officials has held rallies and meetings at several Steward facilities this month urging elected officials to keep the hospitals operating. The group created a petition calling for the transition of Steward hospitals to new nonprofit ownership. Gov. Maura Healey has urged Steward to make an orderly transition from Massachusetts.

Muto, from Holy Family, thinks Steward should leave the state soon. She described a hospital executive at a recent staff meeting as sounding "like the captain on the Titanic telling passengers to remain in their cabins until it’s their turn to get on a lifeboat."

Muto said Steward's problems show how the nation's health care system needs to evolve. She said the role of hospitals has changed with more outpatient treatments, and health care costs increasingly shifting onto patients through high insurance deductibles. She also worries there are few guardrails on for-profit investment in health care, such as private equity firms whose clients include pension funds and retirement accounts.

"It's not just about fixing Holy Family," Muto said. "We have to genuinely look at our system, honestly and say, 'How can we make this better?' "