PROVIDENCE – Lifespan Corp. has officially purchased two hospitals in Massachusetts from Steward Health Care.
The state’s largest health system announced Tuesday it finalized the $175 million purchase of Saint Anne’s Hospital in Fall River and Morton Hospital in Taunton from Texas-based for-profit Steward, which has been unloading its Massachusetts facilities after filing for Chapter 11 bankruptcy in May.
Through the purchase, Saint Anne’s and Morton hospitals – which encounter more than 300,000 patient visits each year – along with 3,500 employees will join Lifespan’s health system.
The health system says it is working with hospitals on a “collaborative integration” process that will take place over a year and focus on delivering patient care.
“First and foremost, the compassionate clinicians and teams at Saint Anne’s and Morton deserve our deepest gratitude for the care they continue to provide across southeastern Massachusetts. Their commitment to the communities we will all serve is truly heroic,” said John Fernandez, CEO and president of Lifespan. “Together, we share a vision and will create a thriving health care system that benefits patients in Rhode Island and Massachusetts, reinvests back into its hospitals and its people, and serves as an economic driver for the cities and towns we care for. We look forward to our continued work with the commonwealth of Massachusetts as we integrate these hospitals and practices into our system.”
In a letter to patients of Saint Anne’s and Morton hospitals, Fernandez said patients should still show up for scheduled appointments, seek emergency health care services and contact physicians and care teams as usual. Both hospitals will be open 24/7.
In the coming weeks Saint Anne’s and Morton hospitals will be getting temporary signs that include the new brand. Also, the hospital websites will look different and homepages will be located on Lifespan’s website. Lifespan branding will appear on patient portals and social media pages, as well as posts with updates on the transition.
“During this interim period, our hope is to continue learning together and to make the transition easy for everyone,” Fernandez said in the letter.
The purchase comes as Lifespan, which is in the process of rebranding as Brown University Health, recently laid off 20% of its executive staff. The layoffs would help save the health system $6 million in fiscal 2025.
Peter Markell, chief financial officer of Lifespan, told PBN Tuesday the layoffs were not related to the purchase.
"It was more that we needed to streamline and reduce overhead in the existing operations," Markell said.
Financial reports have shown Lifespan fell short of its fiscal targets, which include reaching a 3% operating margin, in fiscal 2024. Markell said acquiring the hospitals is expected to boost the operating margin and a recently completed fiscal 2025 budget has Lifespan reaching about 2.8% or 2.9% operating margin.
He noted Saint Anne's and Morton Hospitals were in better condition compared to Steward's several other cash-strapped facilities in Massachusetts and they're expected to bring in sufficient cash flow to meet their capital needs. Lifespan does still need to assess what operations and finances went to Steward's corporate executives in Dallas, Texas versus to local operations, he said.
Markell is optimistic, saying that Saint Anne's Hospital has always performed fairly well financially and while Morton Hospital has faced more challenges in the past, it has also shown fiscal improvement in recent years.
"We're feeling positive about the future," Markell said.
Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.
$175M seems like a lot of money considering St Eliz just went for $9M.