Massachusetts is still grappling with unresolved issues from the Steward Health Care crisis, but hospitals that were saved from closing during the bankruptcy process are adapting under new operators, Public Health Commissioner Robbie Goldstein said Wednesday.
Uncertainty persists around under-construction Norwood Hospital, and health care voids left by the closures of Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer, Goldstein said.
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Steward's malpractice insurance company, TRACO, is also waiting for an "important" U.S. Bankruptcy Court decision in January dealing with coverage for physicians, Goldstein said.
TRACO has provided medical malpractice coverage to about 1,400 providers employed by or affiliated with Steward, according to bankruptcy filings. Steward has failed to pay insurance premiums and hand over sale proceeds from hospital transactions, TRACO claims.
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But Goldstein the Steward crisis has largely entered a "new phase" for Massachusetts, including with public health officials on Nov. 14 ending their incident command structure that streamlined the state's emergency response as hospitals were in jeopardy of shuttering.
"The deactivation of incident command symbolized, at least for DPH, a welcome shift toward stabilization in our health care environment after a period of intense monitoring, managing, oversight and concern," Goldstein told the Public Health Council Wednesday morning.
The Steward hospitals that were transferred to new owners "continue to adapt well," the commissioner said.
"Staff who worked in the former Steward hospitals are now employed by reliable health care systems, and have the stability and support they deserve," Goldstein said. "And most importantly, quality patient care is being delivered every day in these facilities."
More on the Steward Health Care hospital crisis
Massachusetts should use lessons from the crisis to make "systemic improvements" and strengthen the state's health care landscape, Goldstein said. Asked by council member Dr. Edward Bernstein of Boston University School of Medicine about holding private equity accountable, Goldstein refrained from discussing hospital oversight legislation that has been stalled in private Beacon Hill negotiations for months.
"I won't comment on the pending legislation that is sitting in a conference committee, but I think many are thinking about the role of private equity in health care, what role it should play in hospital management, medical practice management…ambulatory surgical centers," Goldstein said. "And I think that over the coming months, we are likely to see legislation or additional work through the Legislature to try to address the concerns that people have with private equity in the health care space."
While they haven't completed their work, both branches this session agreed on the need for new statutory safeguards to protect patients from any damage associated with management of health care facilities by profit-seeking private equity firms rather than non-profit corporations.
During a Nov. 24 appearance on WCVB's "On The Record" program, the state's top health care official said there should be guardrails, but also highlighted the role private equity can play in funding health care.
"I might take a position that you would might not expect me to take because of what we've just been through," Health and Human Services Secretary Kate Walsh said. "But I think that the word private equity - substitute private equity for Bank of America. Hospitals are capital intensive resources. They need investment dollars. I think that any blanket statement doesn't make sense, and particularly in a state like Massachusetts, where you've had this life science infrastructure that's funded by venture and private funds."
Walsh continued: "I think that private equity is a mechanism for people to access capital and we have a health care system that has to change. It has to innovate, we have to find better ways to serve people," she said. "I think that it was done really badly at Steward. And it was not just private equity, but real estate investment trusts. There were a number of capital vehicles that were really challenging. But I think the Legislature is right to take their time to understand the complexities. Health care is 20 percent of the GDP in this country. We have to really think very carefully about how and when we interrupt the system."
Health officials are also looking forward to recommendations arriving early next year from work groups tasked with assessing care needs in area that were served by Carney Hospital and Nashoba Valley Medical Center.
"The work of the two working groups will be really critical for us to understand [the] impact of Steward's decisions and the Steward infrastructure," Goldstein said.
State House News Service's Michael P. Norton contributed to this report.
