Policy Issue

Policy Watch: Why Steward Health Care's Actions Affect MetroWest

March 29, 2024

The financial distress faced by privately owned Steward Health Care has made headlines since the start of this year. The implications of Steward’s alleged financial mismanagement include possible medical facility closures, which would impact the patients and employees in Steward’s care as well as Massachusetts residents beyond Steward’s reach. This situation has opened up a conversation about the extent of state government's oversight and influence, or lack thereof, over a privately owned health care system.

One very serious implication of Steward’s mismanagement is the effect facility closures would have on the 200,000 patients, 16,000 employees, and communities it serves. With many facilities serving patients with lower incomes, the loss of a local option could lead to increased barriers to accessing care. Additionally, patients would be forced to seek care elsewhere, potentially overwhelming hospitals that are already reaching capacity due to staffing and other issues, and compromising care for many others.

Steward Health Care has argued that low reimbursement rates due to its status as a high public payer system - meaning that its patient mix is predominantly Medicaid and Medicare users - has driven the financial downfall. But several health care experts and the Health Policy Commission disagree, noting that systems with similar payer mixes have been able to maintain operations. Beyond the volume of patients that will need to find care, the reimbursement rates associated with caring for these patients at different facilities may inflate reported healthcare costs statewide, which in turn affects everyone's bottom line.

Return to all stories