New potential buyer for hospitals emerges
WARREN — Another health care provider, Florida-based Yates Medical Group, LLC, is interested in acquiring Trumbull Regional Medical Center and Hillside Rehabilitation Hospital.
Meanwhile, a hearing is scheduled today on a final settlement in Steward Health Care’s bankruptcy case that would allow several of the ailing health care system’s hospitals, including the two in the Mahoning Valley, to remain open with temporary managers.
Yates Medical Group claims it is the only organization with the capital and resources ready to operate the facilities and purchase the land, according to a press release that also states its offer to do so would have benefited Steward Health’s creditors, shareholders of Medical Properties Trust, Steward Health’s landlord, and the community.
The release states Yates Medical Group expressed an interest in May in acquiring some of Steward Health’s hospitals, and told MPT as recently as last week it had the money to operate the facilities, buy the land and take over as interim operators.
“In fact, with other parties only being interim operators at this point in time, we have now increased our offer to MPT on the purchase of the operations and the land of these hospitals to a price that no one else appears to have offered,” the release states.
Part of the offer includes “reopening a much-needed hospital that was shut down a few years ago,” that would serve the Mahoning Valley as well as Portage and Stark counties, the release states. It appears it is referring to the former Northside Hospital in Youngstown.
“This further demonstrates our unwavering commitment to the people of these communities. We are still very interested in and fully committed to purchasing Trumbull and Hillside and are actively pursuing the acquisition to ensure that these hospitals continue to serve the community with the highest ethical standards,” the release states.
Last Wednesday, a U.S. bankruptcy court judge in Houston approved a temporary settlement between Steward Health, MPT and other parties in the case that named interim operators for 15 Steward Health hospitals, including Trumbull Regional and Hillside.
Named the temporary manager for the local facilities was Flint, Michigan-based Insight Health System, which later announced plans to pursue ownership as nonprofit organizations.
Yates Medical Group also intends to convert the hospitals into nonprofits, and is in the process of making the medical group a nonprofit, too, the release states.
The company also said it would relocate to Ohio, and has begun making plans to do so, the release states.
Its chief executive, Benjamin Yates, rotated at Trumbull Regional as a medical student, has a personal connection to several staff members of the hospital, members of the community, and multiple people from Western Reserve Health Education, which provides medical residency training at Trumbull Regional and Hillside.
TODAY’S HEARING
A hearing on the interim settlement in Steward Health’s case is scheduled for noon Eastern time today.
Attorneys for Steward Health on Sunday filed a final order for the court to consider. It drew some responses, including from the Ohio Nurses Association, which represents registered nurses at Hillside; and jointly from American Federation of State, County and Municipal Employees Ohio Council 8 and Service Employees International Union District 1199 WV/KY/OH, both of which represent a variety of workers at Trumbull Regional and Hillside.
On Monday, they filed what in legal parlance is called a reservation of rights regarding the transition of collective bargaining agreements to the new interim managers and then to a designated operator.
Their issue is that the final order contains a condition that when the facilities are sold, they are to be done so “free and clear of successor liability,” according to ONA’s motion, and don’t want that to be construed to include the collective bargaining obligation.
The unions also raised the matter Wednesday. An attorney for Steward Health, Ray Schrock, said then Steward Health is still a party to the collective bargaining agreements and “remain bound to those agreements.”
“Our hope and our expectation is that all of these CBAs (collective bargaining agreements) are going to be assumed by the parties. That is not defined yet with the interim managers. We’re going to have to work with parties around that, but that certainly is our expectation moving forward and that we’re going to be working cooperatively with the unions as well as the regulatory bodies that are in place,” Schrock said Wednesday.
Sharon Regional Medical Center is not among the 15 hospitals in the agreement. That’s because Meadville Medical Center, which submitted a letter of interest Aug. 12 to acquire Sharon Regional, is progressing on a plan to acquire the downtown Sharon, Pa., facility.
The commonwealth has agreed to pay $4.5 million — $1.5 million this month and in October and November — to cover the losses at Sharon Regional in anticipation of a Dec. 1 purchase closing by Meadville Medical Center.
Another filing Monday states Pennsylvania has made the first $1.5 million payment.
“Meadville Medical Center is currently conducting due diligence and is working on the form of an asset purchase agreement,” the filing states.