Michigan company wanted to buy all of Stewart’s Mass. hospitals. Stewart said no

A Michigan-based health care company that specializes in treating struggling hospitals made an offer to buy all of Stewart’s bankrupt Massachusetts hospitals, WBUR has learned, but the offer was rejected as unprofitable.

While Steward’s high rents are a hurdle for some bidders, Insight Health System was willing to accept payments to Steward’s landlord. Still, the deal never materialized, according to Insight officials.

“Insight has made an offer for all of Stewart’s hospitals in Massachusetts, and we have expressed a willingness to negotiate lease terms and payments,” Atif Bawahab, Insight’s chief strategy officer, said in a statement. “No agreement was reached, but we remain interested in being part of the solution to keep the hospitals open.”

Steward’s critics, including the Massachusetts Nurses Association, say the company should have more carefully considered all bidders to avoid the planned closures of Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer.

Carney Hospital in Dorchester. (Jesse Costa/WBUR)

Steward officials plan to close the facilities by the end of this month, saying they have not received any “qualified” offers for those hospitals. The company is working to finalize deals with other bidders for the five remaining Massachusetts hospitals but has not yet released the names of potential buyers.

Steward representatives declined to comment on why they rejected Insight’s offer.

In bankruptcy court last week, one of Steward’s attorneys, David Cohen, said, “There have been some parties that have expressed interest in taking over the operations” of Carney and Nashoba Valley. But there have been “no viable offers from parties with the financial means or financial support … to actually run the hospitals in a way that would be acceptable to state regulators.”

Insight, based in Flint, Michigan, is largely unknown in Massachusetts and has no other interests in the state. Insight officials did not explain how they would finance the bailout deal for Steward Hospitals.

Bawahab said Insight has “a wealth of experience taking leadership of struggling, underperforming healthcare organizations across the country and transforming them into sustainable operations that meet the needs of the communities we serve.” The company operates or manages hospitals in Michigan, Illinois, New Jersey and other states.

Healey administration officials declined to comment on Insight or its offer to take over the Steward facilities.

“Carney and Nashoba Valley did not receive qualified bids. We are focused on supporting patients, physicians and staff through this transition and are doing everything we can to ensure Steward finalizes contracts to save the remaining hospitals,” Olivia James, a spokeswoman for the Executive Office of Health and Human Services, said in an email.

Healthcare workers in Carney and Nashoba Valley are protesting planned hospital closures, calling on state officials to step in. About 1,250 people in Carney and Nashoba Valley are expected to lose their jobs.

“These hospitals need to stay open, both in Dorchester and in Nashoba Valley,” said Katie Murphy, president of the nurses association. “Neither of these communities are redundant.”

However, the administration has taken no steps to prevent the closures. Instead, administration officials are working with Steward to transfer patients from Carney and Nashoba Valley hospitals, Hugh McDonald, an attorney representing the state, said in bankruptcy court last week.

Administration officials said they are focused on keeping the remaining Stewart hospitals in Massachusetts open: St. Elizabeth’s Medical Center in Brighton, Good Samaritan Medical Center in Brockton, St. Anne’s Hospital in Fall River, Morton Hospital in Taunton and Holy Family Hospital in Methuen and Haverhill.

Norwood Hospital, which closed in 2020 following a flood, remains closed and was not included in the bankruptcy sale.

The Healey administration is developing a plan to support new operators of Stewart hospitals with streams of public funding. Administration officials said the recently approved state budget includes $35 million per year for three years to help new hospital operators. Combined with matching federal funds, new operators would receive $80 million per year for the next three years.

In addition, the administration is poised to pay an undisclosed amount of Medicaid payments to health care providers that take over Stewart hospitals. Administration officials have said the funding will help cover operating costs, including salaries and supplies, and cover financial losses. The payments are also intended to help the new operators pay for hospital building improvements.

But Steward has yet to finalize deals on those hospitals, largely because of disputes between Steward and the companies that own the Massachusetts properties — Medical Properties Trust and Macquarie Asset Management. Apollo Global Management, which holds a mortgage on the properties, is also involved in the negotiations.

The companies are working to finalize the deals by Tuesday, when Steward is expected to ask a bankruptcy court to approve the deal, which would provide $30 million upfront for Medicaid from Massachusetts officials to keep the hospitals afloat for the next few weeks. Administration officials have said the money is contingent on Steward signing agreements with buyers.

As State Attorney McDonald warned last week, without deals, Massachusetts could find itself in a “public health crisis.”