Lawmakers urge US to take hard look at plan
weaken Steward’s eight hospitals in Massachusetts, including St. Elizabeth’s Medical Center in Brighton and Carney Hospital in Dorchester.
Warren said the lawmakers’ top priority is to keep the financially troubled hospitals open. The cash-strapped hospital system, which moved its headquarters from Boston to Dallas in 2018, has fallen behind in paying vendors and is seeking new owners for its hospitals in the state.
“Steward and Optum are trying to sell this deal as a savior for the hospitals,” Warren said. “But I’m concerned this deal would not help and would potentially make things worse . . . There’s no guarantee that any of the money [from the sale] would be used to strengthen the hospitals.”
In the letter, the lawmakers noted that Steward, which operates 31 for-profit hospitals in eight states, faces a “deep cash crunch” because of what they called mismanagement by executives who cashed in millions in dividend payments after selling the hospital buildings and leasing them back from an Alabama real estate investment trust.
“Steward’s threat to close hospitals should not prevent DOJ and FTC from conducting a close and careful review of the proposed UnitedHealth acquisition,” the delegation members wrote.
A spokeswoman from the FTC declined to comment on the lawmakers’ letter. The agency is required to conduct a preliminary review of any merger with a value topping $101 million to determine if it raises anticompetitive issues that merit a deeper review.
Representatives from the Justice Department didn’t respond to an inquiry on whether they plan to review the Steward-Optum deal.
Steward and UnitedHealth filed a nonbinding letter of intent on March 26 with the Massachusetts Health Policy Commission, which will also conduct a preliminary review of the proposed acquisition. The filing did not list a purchase price.
Neither Steward nor UnitedHealth would comment on the delegation’s call for a review of their purchase plan. The parties also didn’t respond to questions about the ownership of Stewardship or how many doctors are part of the Stewardship network.
Members of the Massachusetts delegation have been deeply critical of Steward and its chief executive, Ralph de la Torre, lambasting him for declining an invitation to testify at a Senate field hearing in Boston last Wednesday. The hearing also focused on the role of Steward’s former private equity backer, Cerberus Capital Management, which cashed out of its investment in the hospital system in 2020.
But in their letter to the DOJ and FTC, the lawmakers were equally critical of UnitedHealth, the nation’s largest and most profitable health care conglomerate, noting that it owns multiple assets, including a pharmacy benefit manager, a claims processor, a bank, and home health care operations in addition to its insurance and physicians businesses.
They said Optum’s expansion in Massachusetts was particularly concerning because it employs or has affiliations with about 10 percent of all US physicians, giving it a “stranglehold” over the market.
“UnitedHealth can, and indeed does, force doctors to limit networks, cut services, and see more patients per day to pad its profits,” the letter said.