PHOENIX (AZFamily) — New information has come to light about the health care company under fire for issues with St. Luke's Behavioral Health.
Earlier this year, Steward Health Care, which owns four hospitals in Arizona, filed for bankruptcy.
The state closed St. Luke's Behavioral Health Center this week after its air conditioning system failed, forcing about 100 psychiatric patients to be transported for safety.
Steward Healthcare also owns Tempe St. Luke's Hospital, and an Arizona family learned that Tempe St. Luke's air conditioner broke last year, resulting in the hospital being fined nearly $12,000 because the hospital hadn't properly maintained the cooling equipment.
Arizona's Family previously reported that Steward filed for bankruptcy in May.
Since then, Arizona and other states have been scrambling to find buyers to keep these hospitals afloat, all of which is currently being heard in bankruptcy court in Texas, but this will have a major impact on local patients.
“We saw across the country that stewards were not paying bills, being sued by vendors and were under a lot of pressure financially, so I guess it wasn't such a shock when they declared bankruptcy,” CBS News investigative producer Michael Kaplan said.
He said his team began looking into Steward Healthcare about two years ago.
“It turns out that the owners of Steward Hospital engaged in financial actions that furthered their own interests at the expense of the hospital's patients,” Kaplan said, “including selling off hospital real estate, taking large dividends and purchasing expensive yachts.”
Kaplan said that despite widespread criticism, the company maintains it is doing its best to operate in a tough healthcare environment and always puts patients first.
“Steward is a company that has acquired numerous hospitals across the country, backed by private equity investors — dozens of hospitals, including in Arizona,” he said.
In court, Steward is selling facilities across the country. So far, no bids have been submitted for the Arizona hospital, but progress is being made in other states.
“Arkansas, Louisiana, Massachusetts and Florida were all bidders, so there was a wide variety of companies coming in to run these hospitals,” Kaplan said.
The Governor of Massachusetts stepped in today by taking control of St. Elizabeth's Medical Center.
“The state and Steward and its partners were unable to find reasonable terms to turn the hospital over to them, so the state has actually taken over the hospital by eminent domain,” Kaplan said. “They found another buyer and are now selling the hospital to that buyer at market value.”
Kaplan explains that the buyer's deadline has been postponed multiple times due to the complexity of the negotiations and conflicting interests.
The next hearing in Arizona is scheduled for Sept. 10, according to court documents.
Meanwhile, Attorney General Chris Mays told Arizona families that he is working to find a solution for Arizona patients.
“I've been in contact with hospital CEOs, and there is at least one hospital in Arizona that is considering this acquisition, and I'm encouraging other hospitals to consider acquiring a hospital system out of bankruptcy court,” Mays said.
Kaplan said Steward hospitals in other states have also closed in the past few months for a variety of reasons.
He is not aware of any facility that has been closed by the state health department for violations as severe as those seen at St. Luke's Behavioral Health Center.
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