Massachusetts
Massachusetts congressional delegation demands answers from Steward’s private equity founders – The Boston Globe
“We have long been concerned about the nefarious role of private equity in our economy,” the delegates said in the letter. “The dire threat of Steward’s collapse appears to be a textbook example of the grave risks posed by a private equity takeover of the health care system.”
A spokesperson for Cerberus was not immediately available for comment.
Previously, Steward has blamed its financial challenges in part on the relatively low rates it receives for services to Medicaid patients. And even for patients with more lucrative commercial insurance, Steward has said, its hospitals still are paid less than others in the market.
The letter comes amid increasing struggles for Steward Health Care, which is facing numerous lawsuits over alleged nonpayment to vendors, closing hospitals in other states, and having difficulty making rent payments. As reported by the Boston Globe, executives have been in talks with Massachusetts state officials over possible solutions to their financial crisis, which have included options ranging from selling or closing some hospitals or services, to at times requests for state financial support.
The Dallas-based health system, which counts nine hospitals in Massachusetts and more than 30 nationally, has so far announced the closure of one facility, New England Sinai Hospital, a rehabilitation hospital in Stoughton. Additional closures have not been announced, and the company has insisted that none are imminent.
Still, financial challenges have created problems at facilities that remain. Supply shortages have been so pervasive that Mass General Brigham removed some of its doctors for a time from performing surgeries at some Steward hospitals. Since late January, the Department of Public Health has been doing daily monitoring at many Steward hospitals to check on staffing and service availability, monitoring they increased this week.
The note to Cerberus was signed by the entire all-Democratic, delegation, including US Senators Elizabeth Warren and Edward Markey, and US Representatives Richard Neal, James McGovern, Stephen Lynch, William Keating, Katherine Clark, Seth Moulton, Lori Trahan, Ayanna Pressley, and Jake Auchincloss. According to the delegation, the current financial precarity was created — if not magnified — by Cerberus’s actions.
Warren’s office in particular has targeted private equity firms in legislation she’s filed, including the Stop Wall Street Looting Act, which among other things would have made private equity firms jointly liable for all the debt incurred by the acquired entity. Warren has filed such legislation in 2018 and 2021, though it did not pass.
Named after the mythical three-headed dog guarding the gates of the underworld, Cebrerus became involved with Steward at its founding. As detailed by the letter, Cerberus invested $246 million through the purchase of Caritas Cristi Health Care in 2010, rechristened the system as Steward, and left CEO Dr. Ralph de la Torre in charge.
Six years later, Cerberus-owned Steward signed a $1.25 billion deal with Medical Properties Trust, in which Steward sold its hospital properties to MPT, locking Steward into a multiyear, multimillion dollar lease payment. The deal returned Cerberus’s initial investment, but the private equity firm still retained a controlling stake in the company.
In May 2020, Cerberus exited entirely, transferring its ownership stake to a group of Steward doctors in exchange for a note that would provide regular interest payments. Steward borrowed $335 million from MPT in January 2021 to buy the note.
“Over the six-year period, Steward took on over a billion dollars in liabilities — while Cerberus executives profited handsomely,” the letter states. “The net result of these transactions appears to be an unfolding tragedy. Cerberus and its private equity executives received $800 million in profits, while thousands of Massachusetts health care workers’ jobs are at risk and 10 communities in the Commonwealth face the potential closure of hospitals that are debt-ridden, unable to pay their bills, and teetering on the financial brink.”
The letter comes after the delegation sent a similar missive to de la Torre in late January, asking for a seat at the table as Steward discussed its plans with state officials, and wanting a briefing on the health system’s financial position and the status of its facilities in Massachusetts.
Lynch said his staff and others met with Steward executives and were informed that Steward’s intent was to exit the Massachusetts health market. Of the remaining eight hospitals that will exist after the rehab hospital’s closure, four — Nashoba Valley Medical Center, St. Elizabeth’s Medical Center, Holy Family Hospital, and Norwood Hospital — had to be transferred urgently.
Norwood Hospital has been temporarily closed since 2020 due to catastrophic flooding.
Lynch said at the root of the financial struggle was the for-profit structure of Steward.
“They have two missions — they have to satisfy the obligations they have to their private equity firm and shareholders to generate a profit,” he said in an interview. “And then they got another mission, to provide high quality health care. Sometimes those two missions are at odds. There is friction between them. That’s at the root of this. It’s their business model.”
Jessica Bartlett can be reached at jessica.bartlett@globe.com. Follow her @ByJessBartlett.
Massachusetts
New Bedford MS-13 Member, Illegal Alien Pleads Guilty to Role in Brutal Murders In Massachusetts, Virginia
Frankli
Police shot and killed a man who officials say rushed officers with a knife during a call in Lexington, Massachusetts, on Saturday.
Middlesex County District Attorney Marian Ryan said the situation started around 1:40 p.m. when Lexington police received a 911 call from a resident of Mason Street reporting that his son had injured himself with a knife.
Officers from the Lexington Police Department and officers from the Northeastern Massachusetts Law Enforcement Council (NEMLEC), who were already in town for Patriots’ Day events, responded to the call.
Police were able to escort two other residents out of the home, initially leaving a 26-year-old man inside. According to Ryan, while officers were setting up outside, the man ran out of the home and approached officers with a large kitchen knife.
She added that police tried twice to use non-lethal force, but it was not effective in stopping him. The man was shot by a Wilmington police officer who is a member of NEMLEC. The man was pronounced dead on scene and the officer who fired that shot was taken to a local hospital as a precaution.
The man’s name has not been released.
Ryan said typically in a call like this where someone was described as harming themselves, officers would first try to separate anyone else to keep them out of danger, which was done, and then standard practice would be to try to wait outside.
“It would be their practice to just wait for the person to come out. In the terrible circumstances of today, he suddenly rushed the officers, still clutching the knife,” Ryan said.
The investigation is still in the preliminary stages and more information is expected in time. Ryan said her office will request a formal inquest from the court to review whether any criminal conduct has occurred, which is the standard process.
This happened around the same time as the annual Patriots’ Day Parade, and just hours after a reenactment of the Battle of Lexington, which drew large crowds to town.
This is a developing story. Check back for updates.
Massachusetts
‘An impossible choice’: With little federal help to combat rising costs, Head Start looks to Massachusetts for more help – The Boston Globe
In Massachusetts, roughly 1,300 slots for children across Head Start’s 28 agencies have been eliminated in the last three years because federal funding has plateaued over that time, while the cost of running the program continues to rise, according to the Massachusetts Head Start Association. Nationally, Head Start enrollment dropped from 1.1 million kids in 2013 to around 785,000 in 2022, according to research by the Annie E. Casey Foundation.
“If they didn’t get into a Head Start program, they would be sitting at home,” said Brittany Acosta, a Head Start parent in Dorchester.
It’s teachers are drastically underpaid, and there’s a serious need for a rainy day-type fund should the federal government shut down again, the association says. As they’ve done in years past, state lawmakers have offered to provide financial relief, but the Massachusetts Head Start Association’s request for 3 percent above the amount it received last year, an additional $4.6 million to help its staff keep up with the state’s rising cost of living, so far has not been allocated.
Last year, President Trump’s leaked budget proposal revealed he considered eliminating Head Start entirely. Then, in the summer, he cut off Head Start enrollment for immigrants without legal status. And during the fall’s government shutdown, four Head Start centers in Massachusetts closed because they couldn’t access their funding.
Trump’s latest budget proposal shows a fourth year without increasing funding for the program, which was established in the mid-1960s.
Michelle Haimowitz, executive director of the Massachusetts Head Start Association, said the program doesn’t want to eliminate more child slots than it already has, but paying teachers a competitive salary is equally important in order to keep them from leaving for higher paying jobs. Head Start teachers make under $50,000 annually compared to over $85,000 for the average Massachusetts kindergarten teacher.
“It’s an impossible choice,” Haimowitz said. “When we reduce the size of our programs, we’re not reducing the size of the need.”
Massachusetts is one of few states that supplements federal funding for Head Start, and last year it increased the program’s state grant from $5 million to $20 million, adding to the $189 million in federal aid it receives in this state.
“We can’t run a program without giving staff a raise for three years,” Haimowitz said. “Our next fight now is not just for survival, but it’s for thriving and growth.”
The Massachusetts House Ways and Means Committee on Wednesday released its budget, which doesn’t grant Head Start’s request of a 3 percent boost. But state Representative Christopher Worrell filed an amendment for additional funding. Worrell, whose district covers parts of Dorchester and Roxbury, said he loves Head Start’s embrace of culture, recalling one visit to a center where he could smell staff cooking stew chicken, a traditional Caribbean dish.
“I’ve been to dozens of schools throughout the district, and you don’t get that home-cooked meal,” Worrell said. “[The state is] stepping up and doing the best we can with what we have.”
At the Action for Boston Community Development’s Head Start and Early Head Start center in Dorchester, the children of Classroom 7 arrived one Monday morning and dove into bins of magnetic tiles before their teachers, Paola Polanco and Leolina Rasundar Chinnappa, served breakfast. Acosta dropped off her 4-year-old daughter, Violeta, before reporting to her teaching position at the center, where several other Head Start parents also work.
“It’s important for all Head Start parents to have the opportunity to give their child an experience in a learning environment before they actually start kindergarten,” Acosta said.
Beyond providing early education and care to children of low-income families, from birth to age 5, the program helps them access other resources, including mental health services, SNAP benefits, homelessness assistance, and employment opportunities.
It also serves as daycare for parents who might not be able to afford it, while they’re at work.
Research has shown the importance of preschool in a child’s development with one 2023 study, focused on Boston public preschools, finding that it improves student behavior and increases the likelihood of high school graduation and college enrollment.
For Rickencia Clerveaux and Christopher Mclean, the Dorchester Head Start center is the only place they feel comfortable sending their 3-year-old son, Shontz, who is on the autism spectrum. Shontz’s stimming — repetitive movements that stimulate the senses — has reduced, and his speech has improved since he joined the center in 2024, Clerveaux said.
His parents say he’s also come out of his shell. Mclean now drops his son off and gets a simple “bye” as Shontz joins his classmates, he said.
He and Clerveaux said they appreciate the specialized attention Shontz can receive from teachers, such as when staff identified that Shontz might have hearing issues. His parents were able to follow up with their doctor and get Shontz to have surgery to improve his hearing.
“It’s a safe net for parents,” Clerveaux said. “There’s so many ways that him being here helps him grow better.”
Without Head Start, Clerveaux said a lot of pressure would be put on parents to find care for their children, “knowing that they’re already struggling or not getting the ends to meet.”
“That’s a burden for everybody in the community,” she said. “If there’s no funding, there’s no daycare and parents cannot work.”
Lauren Albano can be reached at lauren.albano@globe.com. Follow her on X @LaurenAlbano_.
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