BOSTON — On Monday, the Massachusetts Legislature passed a new bill aimed at addressing weaknesses in the state’s health care regulatory system that were brought to light by the failure of Steward Health Care.
The legislation seeks to enhance financial transparency by requiring more detailed information regarding hospital finances, which supporters argue will contribute to a more stable and sustainable health care environment.
The proposed measure intends to strengthen the reporting capabilities of the Massachusetts Center for Health Analysis and Information and expand the oversight powers of the Health Policy Commission by instituting additional reporting mandates for hospitals.
Moreover, the bill aims to increase penalties for failing to meet the new data reporting obligations by both raising existing fine levels and eliminating the cap on financial penalties.
Democratic Senate President Karen Spilka expressed her commitment to addressing current challenges in the health care system, stating, “As we confront a health care landscape marked by soaring costs and the consequences of private equity mismanagement, we are reaffirming our dedication to our residents by protecting patients, enhancing access to care, and holding private equity accountable.”
Detractors of private equity’s role in health care cite Steward’s bankruptcy as an example of the risks involved when financial executives prioritize profits over patient care. They argue that such practices can lead to hospitals accruing significant debt and losing valuable assets.
The bill will now proceed to the desk of Democratic Governor Maura Healey for her approval.
Steward Health Care, which is based in Texas and manages approximately 30 hospitals across the country, declared bankruptcy in May.
In the aftermath, the company endeavored to sell several hospitals within Massachusetts. However, it received unsatisfactory bids for two facilities—Carney Hospital in Boston and Nashoba Valley Medical Center in Ayer—leading to their eventual closures.
In September, a federal bankruptcy court sanctioned the sale of Steward’s hospitals in Massachusetts.
