Rhode Island-based health system Lifespan said on Aug. 29 that it has signed a purchase agreement to acquire two of Steward Health Care’s hospitals in Massachusetts. The price tag: is $175 million.
If approved by a bankruptcy court judge and state and federal regulators, the agreement will cover both the hospital operations, and the land and buildings, for St. Anne’s Hospital in Fall River and Morton Hospital in Taunton.
A person familiar with the deals said Lawrence General has also finalized an agreement to purchase Holy Family Hospital with locations in Methuen and Haverhill. The announcements are the first tangible sign that months of negotiations to determine the future of Steward’s Massachusetts hospitals are bearing fruit.
Steward, a Dallas-based for-profit company and the third-largest hospital system in Massachusetts, declared bankruptcy in May, raising questions about what would happen to its hospitals. The company is also working to finalize sales agreements for two other Massachusetts facilities — St. Elizabeth’s Medical Center in Brighton and Good Samaritan Medical Center in Brockton — and dozens more in other states.
Meanwhile, Steward is closing two Massachusetts hospitals: Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer. The facilities will close on Aug. 31 over the objections of workers and residents.
Lifespan officials said the majority of the purchase price for Morton and St. Anne’s would go toward the hospitals’ land and buildings, which have been a point of contention during the negotiations. The real estate is owned by outside investors who are sparring with Steward over who will get the bulk of the proceeds from hospital sales.
Lifespan is Rhode Island’s largest nonprofit health system, which operates the state’s flagship teaching hospital and children’s hospital. It is affiliated with Brown University and is in the process of rebranding as Brown University Health.
Peter Markell, Lifespan’s chief financial officer, said his team has been in discussions with Steward since the beginning of the year. He said the acquisitions fit Lifespan’s strategy of growing its footprint.
“We do care about these communities,” he said in an interview. “We do see them as key to the area we want to serve.”
Some patients have chosen to avoid Steward hospitals this year as the company struggled to pay bills and entered bankruptcy. Markell said Lifespan will work to bring them back.
“We’re going to have to convince the patients in these communities that what they knew before it went into bankruptcy and all that stuff — we’re going to bring back to life and make even better,” he said. “But that’s up to us, to convince the people in the communities.”
Lifespan plans to create an affiliate called Lifespan of Massachusetts to operate Morton and St. Anne’s and will borrow funds to finance the deal. Lifespan officials said they are finalizing a separate agreement to receive “modest” support from the Healey administration to help cover the cost of operating the hospitals “for a limited time frame.”
“I am confident our team has the experience and know-how to rebuild the infrastructure of these two hospitals and operate them as successful and thriving not-for-profit organizations,” Lifespan President and CEO John Fernandez said in a statement.
A hearing on the Massachusetts hospital sales is scheduled for Sept. 4 in federal bankruptcy court in Houston.
This story was originally published by WBUR. It was shared as part of the New England News Collaborative.
