Today it was announced that Northside Medical Center in Youngstown, Ohio (the hospital in which I was born) is being sold, along with three other area hospitals to Steward Health Care of Boston from Community Health Systems company (WKBN). A total of eight hospitals in Ohio, Pennsylvania, and Florida are included in this deal.
Who Is Steward Health Care? According to the Boston Globe, Steward Health Care System was founded in 2010 to take over the hospitals formerly run by the Archdiocese of Boston. Steward is a for-profit health care provider and is backed by Cerberus Capital Management.
Why did Steward buy these hospitals? Since entering the market in 2010, Steward has become one of the largest health systems in Massachusetts, according to the Boston Globe. On September 26 2016, the Boston Business Journal reported that "Steward Health Care announces national plan, $1.25 billion investment." Around that same time, Modern Healthcare reported on September 24, 2016, Community Health Systems, "Why one of the largest US hospital chains is dismantling itself." Sounded like the business perfect storm.
What's good about Steward? It seems to be able to turn losses into gains. In fiscal 2011, the first year of running the hospitals, Cerebrus reported a $14.6 million loss (modern healthcare). However, by 2015, the company showed an operating profit of $131 million (boston globe). During this process, Quincy Medical Center was closed in 2014.
What's bad about Steward? In addition to closing the hospital above, Steward has been fined over $40,000 for failing to submit financial data on time to state agencies in Massachusetts. The Boston Globe states, "The company remains locked in a dispute with state officials over what financial information it must disclose." I'm no bureaucrat, but I would imagine Steward would have to submit financial information to Ohio, Pennsylvania, and Florida where they now own hospitals. Are more fines in the future?
What does this mean for the Youngstown, Ohio hospital market? For those locally here in the area, it is no secret that Northside Hospital has been struggling, even before Community Health Systems purchased them. Meanwhile, its local competitor, Mercy Health, has been expanding its presence in the Valley. In addition, regional competitors Cleveland Clinic and University Hospitals of Cleveland have been trying to come in from the north, and University of Pittsburgh Medical Center (UPMC) has been trying to come up from the south.
So, this area, like other areas in Ohio, is becoming a very competitive hospital market. What will be the fate of Northside Medical Center in Youngstown, Trumbull Memorial Hospital in Warren, Hillside Rehabilitation Hospital in Warren, and Sharon Regional Health System? Looking at the short history of Steward, and, let me tell ya, I'm no economist. But, my guess is that it's likely that one, or more than one of these four hospitals may be closing in the near future. Which one(s)? We'll see...