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Despite financial woes, Sebastian’s hospital is not seen on life support

STORY BY PIETER VANBENNEKOM (Week of January 25, 2024)

Critical medical supplies may run short from time to time, but insiders insist that despite “obvious cash flow problems,” lawsuits by unpaid vendors and reports that the Sebastian River Medical Center is six months in arrears on its water and sewer bill, the hospital is nowhere near to shutting its doors.

“I do know what’s going on,” says Theresa Tolle, who is chairperson of the hospital’s local Board of Trustees and runs the independent Bay Street Pharmacy across U.S. Route One from the North County hospital. “And I do not believe that the closing of the hospital is imminent.”

Tolle says she was not authorized to share any further details on the financial condition of the hospital or its plans for the immediate future because of corporate policies. But she acknowledged that the cash flow problems of the for-profit hospital and its parent company are well documented.

Sebastian River Medical Center Chief Executive Officer Ronald Bierman failed to respond to Vero Beach 32963 requests for further information, as did the designated public information spokesperson for the parent company’s area hospitals, who is located at another facility in Rockledge in Brevard County.

Last Friday night at the beginning of the weekend, a manager from  a competing hospital in the area was delivering a box of medical supplies to the Sebastian hospital on an emergency basis. The manager, who declined to give his name or the name of the institution he worked for, hastened to point out that he did not know whether the Sebastian hospital’s regular supplier had cut off service because of non-payment. Instead, he said this is a normal service that area hospitals, even those in competition, provide to each other from time to time to help each other out when one of them runs low on something.

“I have heard the rumors swirling around the three area hospitals owned by this company,” the manager said, referring to hospitals in Sebastian, Rockledge and Melbourne. “All the talk has certainly helped us because doctors and patients are now coming to us. I had a surgeon call me at home at midnight the other day begging for a slot in our operating room the next day because he couldn’t operate at Sebastian anymore.”

A local orthopedic surgeon last week also said he had hastily canceled joint replacement surgeries for several patients planned for Sebastian River Hospital’s operating room the following day because a key supplier had stopped sending needed supplies to the hospital.

Like other hospitals in the area, the Sebastian River Hospital has in recent years bought up several physician practices in the area, converting the physicians working there from entrepreneurs into employees of the hospital system.

Patients of those physician practices have reported delays in getting the results of diagnostic testing because of a shortage of medical technician employees. Because of a hiring freeze, departing employees cannot be replaced and the workload for the remaining employees has increased.

The 145-bed Sebastian hospital, the only alternative in the county to Cleveland Clinic’s Indian River Hospital, was acquired in 2017 by Steward Health Care Systems, a company headed by a group of physicians and headquartered in Dallas.

Steward has been plagued by financial problems nationwide for several years. Headlines in medical trade and finance publications began popping up in 2022 when Steward restructured hundreds of millions in debt.

A Melbourne resident whose husband died recently after an 11-day stay at Steward’s Melbourne hospital said she would never set foot in the hospital again. “They never did a biopsy on him as they should have,” she said, “and the nurses and nurses’ assistants are so overworked they never helped him shower or bathe in the 11 days he was there. The care was just horrible or non-existent. And if they’re in such financial trouble, you’d think they’d want to get paid but after several months, I still never got a bill from them for my husband’s stay there.”

Another Melbourne resident said her daughter works as a nurse at a competing Melbourne hospital but would never consider working at a Steward-owned facility.

Sebastian River Medical Center is the go-to hospital for fixed-income senior-citizen communities not only in Sebastian, but also in the Micco-Barefoot Bay area in South Brevard County, and is the closest hospital to Fellsmere’s migrant agricultural worker population.

Steward has blamed low and slow Medicare and Medicaid reimbursements as major factors in the company’s financial challenges, as it’s been nationally reported that 70 percent of Steward’s clientele are Medicare and/or Medicaid recipients.

On a website where medical staff rate their employers, no one had anything good to say about Steward.

“Save yourself the stress,” wrote one nurse, referring to chronic staff shortages and overworked conditions for the remaining employees. “Just don’t go to work there. Just DON’T.”

A former hospital employee told Vero Beach 32963 that staffers read and share media reports about Steward’s financial woes, massive lawsuits and investigations involving the company’s deep indebtedness to its real estate investment trust (REIT) landlord and that, combined with SRMC’s lack of a pension plan, make them fear for their futures.

The American Prospect reported on how Steward and landlord Medical Properties Trust – which owns the Sebastian hospital’s campus – shuffled $400 million around to shore up Steward so it could pay rent straight to MCT in an article entitled “The Great American Hospital Shell Game.”

On Jan. 19, the Boston Globe reported on evidence from public records and sources within the Steward company that the hospital system which owns nine Massachusetts facilities is “in such grave financial distress that it may be unable to continue operating some facilities ...  The fast-moving crisis has left regulators racing to prevent the massive layoffs and erosion of care that could come if hospital services were to suddenly cease.”

Steward executives did not respond to the Globe’s questions, but the paper reported that “according to a person with direct knowledge of the situation, Steward has told state regulators that it has until the end of the month to make a plan that will satisfy its lenders.”

On Monday, xtelligent Healthcare Media reported “Steward Health Care may have to close some facilities as the for-profit health system navigates financial distress,” saying the financial woes of the largest tax-paying hospital group in the United States “may create ripples across the country.”

“Trying to find money to pay bills and assuring others don’t quit because of low morale,” is how a former Steward physician assistant in Port Arthur, Texas, described a typical work day. “The hardest part of the job is seeing patients being hurt by keeping the facilities open. The CEO is still enjoying the yacht! Those bills are paid.”

Staff Writer Lisa Zahner contributed to this report.