5 South Florida hospitals are under new management. What that may mean for healthcare
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Hospitals in trouble
A large national healthcare company has filed for bankruptcy. A look at how Steward’s situation is affecting hospitals in South Florida.
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Five South Florida hospitals formerly run by a troubled health company are under a new owner and management.
Nevada-registered Healthcare Systems of America was tapped to temporarily run the hospitals, which were taken over by their landlord as part of a bankruptcy settlement. That arrangement is now permanent.
The five hospitals are Palmetto General Hospital in Hialeah, Coral Gables Hospital, Hialeah Hospital, North Shore Medical Center in North Miami-Dade and Florida Medical Center in Lauderdale Lakes. Patients and employees will now have to wait and see if the new owners can fix the service cutbacks, staffing challenges and other problems that have affected patient care.
Healthcare Systems of America, or HSA, served as interim manager for the South Florida hospitals since September, managing the day-to-day operations as part of a bankruptcy court deal between hospital owner Steward Health Care System with landlord Medical Properties Trust.
The agreement to turn HSA into the permanent hospital operator got the green light last week in Houston bankruptcy court from U.S. Judge Christopher Lopez. The sale agreement between Steward Health, Medical Properties Trust and HSA is expected to be finalized by the end of October.
“Healthcare Systems of America is focused on providing timely and quality healthcare to the Greater Miami area,” company CEO Michael Sarian said in an emailed statement to the Miami Herald. “We are delighted to have such dedicated and hard working local employees as we work together to serve the community by building a healthier future with excellent care close to their home.”
Steward Health did not immediately respond to the Miami Herald’s request for comment.
Court documents show Healthcare Systems of America has signed lease agreements with Medical Properties Trust, which owns the land under the hospitals, and has offered employment to “substantially” all of Steward’s eligible employees at the hospitals.
The health company said employees will retain their seniority and that it will pay unionized workers the same salary and wages as Steward did for at least a year. Besides payroll, HSA is also responsible for other hospital patient care and financial obligations, including provider agreements with Medicare and paying owed 2023 and 2024 property taxes to Broward County.
“Our number one priority is to provide stability and rebuild trust with the community,” Healthcare Systems of America spokesperson Aimee Gill previously told the Miami Herald.
The company, which was registered Aug. 18 in the state of Nevada, is mostly managed by the same team that oversees Los Angeles-based American Healthcare Systems. Michael Sarian is the CEO for both companies. Besides the five South Florida hospitals, HSA will also become the designated operators of two Steward hospitals in Texas.
Hospital employees and union representatives previously told the Herald they hope the new manager will fix the problems faced under Steward. Doctors and nurses at Steward’s hospitals across the country have complained about cutbacks, layoffs, shutdowns and problems with supplies, equipment and delayed payments to vendors and workers, including in Miami-Dade and Broward counties.
READ MORE: Why a healthcare giant has slowed care at a Miami hospital, and where it leaves patients
Steward Health bankruptcy: What to know
Friday’s hearing also signifies that the end is near for Steward’s complicated bankruptcy saga.
Steward Health sold all of its South Florida real estate to Medical Properties Trust in 2021, and has since paid rent to operate its hospitals on the properties it used to own. Steward Health, once considered to be the largest physician-owned health network in the country, tried to sell all 31 of its hospitals to thin $9 billion in debt after filing for Chapter 11 bankruptcy protection in May.
But the sale became complicated when the healthcare company and Medical Properties Trust got into disputes over unpaid rent and also accused each other of attempting to interfere with potential deals to try to make more money. In September, Steward made a deal with the landlord to get out of its lease and keep hospitals open in South Florida and other states.
Steward, which also sold its physicians group, found buyers for some of its hospitals, including three Florida Space Coast hospitals. Other hospitals, including the ones in South Florida, were handed to Medical Properties Trust, which then selected health companies such as Healthcare Systems of America to operate them.
READ MORE: A buyer has emerged for several Florida hospitals owned by a health giant in bankruptcy
In return, Medical Properties Trust would stop pursuing claims against Steward for money owed, including billions related to the lease of Steward’s hospitals in Florida and other states. Steward would also stop pursuing claims against the landlord.
But this isn’t the end of Steward’s legal troubles.
The company earlier this year was put under federal investigation for possible corruption related to business dealings involving state-run hospitals it managed in Malta, an island in Southern Europe.
Steward Health’s founder and CEO Dr. Ralph de la Torre, who recently resigned, has also sued members of the U.S. Senate committee that pursued civil enforcement and criminal charges against him for refusing to testify under subpoena about the company’s finances and handling of its hospitals. The U.S. Senate last month approved the committee’s resolution to hold the hospital executive in contempt.
The former Steward CEO had invoked his rights under the Fifth Amendment before the Senate committee’s hearing to avoid answering questions that could potentially incriminate him. Now, de la Torre is asking the court to declare any enforcement actions related to the subpoena as invalid, unconstitutional and unenforceable.
This story was originally published October 29, 2024 at 5:00 AM.
