Vista operator sought bailout before
Network says it will close Southwest Side hospital unless county and University act
Early in the pandemic, Steward Health Care declared that without a government bailout, it would have to close a hospital it operated in Pennsylvania.
Now, it’s making the same demands in San Antonio.
The private for-profit health care network said Wednesday that it would shutter Texas Vista Medical Center, the Southwest San Antonio hospital formerly named Southwest General — unless Bexar County and its University Health step in.
It was unclear Thursday whether that might happen, but District 4 Councilwoman Adriana Rocha Garcia was calling for University Health to take over the facility, which is in the district she represents.
“As a public hospital, they can also focus on the preventative care that is needed in order to keep people out of that emergency room,” Rocha Garcia said in an interview.
Texas Vista, one of only two major hospitals in the southernmost part of the city, has been serving patients of modest means for over 40 years. The 327-bed facility’s closure, Rocha Garcia and other local officials said, would leave residents with less access to medical services and eliminate a major employer in an impoverished area.
So far, though, its salvation appears unlikely.
The facility’s aging building would require significant upgrades to bring it up to University
Health’s standards, and it’s already planning to build a hospital near Texas A&M Universitysan Antonio, the hospital district said in a statement Wednesday.
Beyond that, it said Steward Health has not “given University Health any opportunity to ‘take over control’ ” of Texas Vista — despite the company saying the health district had denied such an offer.
“Our people need access to a hospital that’s nearby them because that helps their families as well.” District 4 City Councilwoman Adriana Rocha Garcia
“It has also become increasingly clear that our mission and values are not aligned with Medical Properties Trust,” which leases the building to Steward Health, University Health added.
The county confirmed, however, that it had talks with Texas Vista early this year and received assurances that while Steward Health was having financial difficulties, the medical center was not closing.
It has not received a formal proposal to take over the hospital either. As of late Thursday, it said it still had not received such a proposal.
George Hernandez, president and CEO of University Health, was not available for an interview Thursday. Neither was County Judge Peter Sakai, whose staff said he injured his ankle. Former County Judge Nelson Wolff, who retired from elective office at the end of last year, said Texas Vista’s financial state was not brought up to him while he was in office.
Asked to detail its proposal, Steward Health declined to comment beyond the announcement it issued Wednesday.
Rocha Garcia said the county wouldn’t be alone in a government takeover of the medical center that would make sense.
“There’s more programs available, there’s additional funding mechanisms that I think everyone can partner on,” including the state of Texas, she said. “This closure will only exacerbate prevalent health disparities.”
South Side access
A recent Express-news investigation on health inequities across the city showed that local medical facilities are heavily concentrated in North San Antonio.
Many of those hospitals and surgical centers are in areas where patients are generally wealthier and healthier and where providers can collect higher reimbursements from insurance companies.
In the southern part of the city, though, residents’ options are limited. For every eight emergency rooms in more affluent neighborhoods, the South Side has one.
A quarter of District 4 residents have a disability, and a third are 55 and older, making it crucial that they have access to a hospital that is a short drive or bus trip away, Rocha Garcia said.
Texas Vista has 842 employees, and Rocha Garcia estimated that 60 percent of them live on the South Side.
“There are wonderful, perfect hospitals in the (South Texas) Medical Center,” she said. “However, our people need access to a hospital that’s nearby them because that helps their families as well.”
Texas Vista serves “limited-income, highneeds” patients and has been struggling for a while, Steward Health said.
A quarter of the facility’s patients cannot pay for services, and more than half are governmentpay patients. It has been “choked out by the wellheeled ‘public’ hospital competitor across town” and the pandemic exacerbated the red ink, Steward Health said.
“Steward was able and willing to assume financial losses and risks during that extraordinary public health crisis; it is not sustainable to do so any longer,” the network said.
“In order for the hospital to continue to provide safe, high-quality services — particularly for the region’s behavioral health patients, trauma patients and women — an external agent must step up to assist the facility,” Steward Health added. “Barring this, the facility is forced to close.”
In its statement Wednesday, University Health said it was “disappointed” that Steward Health singled out the hospital district and county “as somehow being responsible for their inability to successfully operate Texas Vista, and to imply that local taxpayers should bail them out.”
What is Steward?
Dallas-based Steward Health describes itself as the nation’s largest private physician-led health care network. It operates 39 hospitals across nine states, including seven in Texas.
It was controlled by private equity firm Cerberus Capital Management until 2020, when it reached a deal to buy back control of the company.
It’s used the threat of a hospital closure to force the acquisition of a struggling hospital before.
At the beginning of the pandemic, Steward Health threatened to close Easton Hospital in Pennsylvania unless it received a $40 million bailout from the government. It told the state in a letter that the hospital was in dire financial straits, the Express-times reported.
Steward Health’s demands drew criticism from Pennsylvania officials.
St. Luke’s University Health Network, a nonprofit network, later agreed to buy the hospital. The deal was announced a day after Steward Health said Cerberus had sold its stake, the Wall Street Journal reported.
Steward Health leases many of its other facilities from Medical Properties Trust, a real estate investment trust, or REIT, that is based in Birmingham, Ala.
It is Medical Properties Trust’s largest tenant, representing nearly a quarter of the REIT’S assets last year, according to a filing with the Securities and Exchange Commission.
The REIT appears to be helping Steward remain afloat as its losses mount. Steward Health lost $800 million between 2017 and 2020, and Medical Properties Trust and Steward Health have struck deals to funnel money from the former to the latter, the Journal reported.
Former Medical Properties Trust employees told the newspaper that they “saw deals with Steward Health as a way for the REIT to provide it with cash as it notched losses, which in turn helped Steward make its rent payments and kept (Medical Properties Trust) growing.”
Steward Health has also been embroiled in legal trouble. Last summer, it agreed to pay about $4.7 million to settle allegations of kickbacks. It allegedly paid physicians and physician practice groups for services that were not performed.
New hospital
Last year, the county hospital district’s board of managers approved plans to build a 256-bed hospital across from A&M-SAN Antonio.
University Health bought 68 acres at the west entrance to the campus last year and signed a $500 million deal with A&M-SAN Antonio to construct the hospital and provide education opportunities.
A clinic or public health facility next to the hospital is also planned.
The hospital could open as soon as 2027. The board of managers is expected to take up a contract for a construction manager at its meeting this month.
Rocha-garcia questioned whether University Health could relocate that hospital to the Texas Vista site.
“If there’s already a running hospital, I don’t know how much money it would take to just reinvest in that current structure and keep it going so that way we don’t have to wait two or three years for a new hospital to pop up,” Rocha Garcia said.