In mid-June, Steward Health Care, based in Dallas, signed an agreement to buy five hospitals and associated physician practices from Tenet Healthcare. The $1.1 billion purchase will include Coral Gables Hospital, Florida Medical Center in Lauderdale Lakes, Hialeah Hospital, North Shore Medical Center in Miami and Palmetto General Hospital in Hialeah.
“The Steward physician-owned and physician-led model is focused on acquiring strong, community hospitals and on choosing communities that would benefit from our integrated model of care,” explained Sanjay Shetty, M.D., MBA, president of Steward North America, about the purchase that is expected to close in third quarter 2021.
“South Florida is a terrific market for all of the reasons that you would expect: these hospitals are closely tied to their communities, they have great provider groups in local areas that work well with the hospitals, and they have already been exposed to value-based models such as Medicare Advantage plans.”
While Steward already has three existing hospitals along Florida’s Space Coast, Dr. Shetty said that they are excited to move into the South Florida market.
“Because we already have hospitals east of Orlando in Rockledge, Melbourne and Sebastian, regional synergies are already there. We have established relationships with insurance companies, regulatory agencies and government agencies,” he explained. “And while these are different distinct geographies, our Florida presence will become even stronger through these acquisitions.”
He adds that for some of Steward’s leadership team, it’s also like coming home.
“Our founder and CEO, Dr. Ralph de la Torre, grew up in Florida, and his mother still lives there,” he said.
Steward’s chief medical officer, Dr. Octavio Diaz, previously practiced in South Florida and was the Chief Medical Officer of various facilities there, and Steward’s chief strategy officer, Rubén King-Shaw, Jr., was the COO for Neighborhood Health Partnership before becoming Florida’s Secretary of the Agency for Health Care Administration under Gov. Jeb Bush.
“The good news is that we already know this community and we can’t wait to learn more as we dig in,” Dr. Shetty added.
Changes to Come
According to Dr. Shetty, Steward expects to offer employment to all staff in good standing when the transaction is complete. “Everyone will be staying in place,” he said, “including the physicians in the Tenet Florida Physician Services group, as well as administration and front-line staff.”
Tenet’s revenue cycle subsidiary Conifer Health Solutions will continue to provide services to the hospitals when the transaction is complete; the company’s ambulatory facilities were not included in the transaction.
When it comes to the hospitals themselves, however, Dr. Shetty said that he hopes patients will soon notice a difference.
“While all of these are terrific hospitals at baseline, we plan to use the Steward quality model to drive improved outcomes for patients so that they benefit from an improved patient experience, a shorter length of stay, and a higher quality of care,” he said.
He adds that there will be some things ‘under the hood’ that drive those outcomes, including the deployment of Steward’s electronic ICU (eICU) program that enables board-certified doctors and nurses to provide improved care to high-acuity patients. Since the implementation of Steward’s eICU program at other facilities, ICU mortality rates have dropped more than 20 percent, and length of stay (LOS) has decreased by more than 10 percent.
“Just like at our other facilities, we will be investing in information technology including predictive analytic platforms to improve quality and operations,” said Dr. Shetty. “We’ll also be investing heavily into the facilities themselves to improve not only cosmetic issues but the underlying infrastructure, including equipment and patient rooms.”
The hospitals’ new ownership will also result in the introduction of new clinical programs and increased outreach into the community to drive alignment and support.
“Steward believes that each hospital is part of our community, and we take that very seriously,” said Dr. Shetty. “We spend quite a bit of time getting to know the communities that we serve in order to make sure that we are meeting their needs through our investments, leadership and day-to-day operations.
“We understand that what works in West Texas may not work in Miami, and we recognize that every hospital and community is unique,” he added. “And we’re prepared to make the investment of time and resources to become really excellent community partners.”
