500 Boylston Street, Boston, MA 02116 617-419-4700
A Report Produced by the Health Business Group
Executive Summary: Steward Health Care System has committed $600 million in new capital to build an Accountable Care Organization (ACO) in Eastern Massachusetts. From late 2010 to late 2012, Steward acquired 10 acute care hospitals and grew annual revenues by more than $500 million. The Steward system directly and indirectly supports approximately 33,000 jobs and was responsible for $8.4 billion of economic impact in 2011 and 2012.
Steward’s impact is concentrated in economically disadvantaged cities and towns where unemployment and poverty rates are above average. Steward has shifted eight previously tax-exempt facilities to for-profit status, and now pays local real estate taxes of more than $17 million per year, making the company a top-three taxpayer in seven of its 10 communities.
Steward has made $264 million of capital investments to upgrade facilities and information technology infrastructure. Steward has continued to expand its hiring to match its growth, routinely advertising more than 500 open positions, including more than 150 nursing jobs. Steward pays more than typical employers in Massachusetts. The median full-time Steward job pays $47,071 in wages compared with $43,420 for Massachusetts as a whole, and the company pays all of its employees at least $11.50 per hour, a “living wage” that is $3.50 above the Massachusetts minimum.
Key hospital quality measures have improved significantly during the first two years of Steward’s ownership. Performance improved on mortality, hospital- acquired infections, evidence-based care delivery, length of stay and readmissions. In October 2013, one hundred percent of Steward hospitals earned an A on Leapfrog’s Hospital Safety Score compared with 76 percent in Massachusetts overall and 32 percent nationally.
Hospitals in the Steward system are generally more affordable than other hospitals in Massachusetts, based on reimbursement rates paid by commercial health plans. Consumers who use the Massachusetts Health Connector to purchase insurance coverage pay lower premiums for Steward network products than for other offerings in the same product tier. Steward’s emphasis on managing total medical expenses translates into increased affordability for employers paying for health insurance and for employees who pay less out-of-pocket when they use Steward services.