![]() ![]() “This is an unprecedented level of transparency,” he said. Murphy also noted Steward provided Coakley with detailed information about insurance contracts, market share, and other financial data that is not required to be made public by the nonprofit hospitals with which it competes in Massachusetts. “Today we’re where we thought we’d be” in moving the system to profitability, he said. “Everything that happened in that one-year time frame in the report was expected.” “Since the inception of Steward, we’ve had a very detailed seven-year business plan,” Murphy said. Without those costs, the system would have had a positive cash flow in fiscal 2011, he said. Coakley’s report examined the financial health of the overall Steward system.Ĭhris Murphy, a Steward spokesman, said the company had expected to lose money the first year, partly because of the costs of the acquisition and partly because it was investing hundreds of millions of dollars in capital improvements and information technology in the acquired hospitals. A financial report posted last summer by the state Division of Health Care Finance and Policy showed the system lost $38.9 million for the 2011 fiscal year.īut it included hospitals Steward did not own for the entire year, such as Quincy Medical Center and Morton Hospital, and omitted parts of the business such as pharmacies and home health care. “The next few years will tell whether that model is sustainable.”Ĭoakley’s report is not the first indication that Steward is losing money. “Cerberus and Steward have invested a huge amount of money, and so far there’s no return on that investment,” Bender said. Now they have to execute on it.”Įllen Lutch Bender, president of Newton consulting firm Bender Strategies, said the success or failure of Steward will have a major impact on health care in Massachusetts. As best I can tell, it’s a rational plan. ![]() The real question is does plan to reduce losses cut the mustard. “You can’t do an overnight turnaround and still keep the operation open for business. Bard, codirector of the Tufts Health Care Institute, an educational and training group in Boston. The report noted that Steward already has spent more than $300 million on the hospitals, including the initial investment from Cerberus and money Steward has borrowed. Health care analysts said that because her report focused on a time period early in Steward’s evolution, it is too soon to conclude how the hospital system will progress. Coakley was not available for comment Wednesday. ![]()
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