The operator of the third largest hospital system in Massachusetts, and one of the state’s largest employers, declared bankruptcy early Monday morning. Steward Health Care, which operates eight Bay State hospitals including Dorchester’s Carney Hospital, and has been sinking under a pile of debt to vendors and its de facto landlord, filed for Chapter 11 bankruptcy in Texas, seeking the legal protection to restructure its debt while leaving its hospitals open.

The company said it does not expect any interruption to day-to-day operations and that the bankruptcy filing was “a necessary measure to allow the Company to continue to provide necessary care to its patients in their communities without disruption.”

Gov. Maura Healey stressed that care will continue at the Steward hospitals throughout the bankruptcy proceedings, and that the action brings Steward one step closer to getting out of the state — as Healey has repeatedly called on the company to leave Massachusetts.

“The hospitals that were open yesterday remain open today,” Health and Human Services Secretary Kate Walsh said. “The providers who were employed yesterday remain employed today and the community care that you could access yesterday, you can access today. Today’s bankruptcy filing does not change that. What bankruptcy does mean is that a federal court in Texas will be working with Steward creditors, our legal representation and others to address their financial challenges.”

State government will also send legal counsel to represent the Bay State’s interests in the Chapter 11 bankruptcy proceedings in Texas, Walsh said.

In the hours since the bankruptcy filing was announced in a middle-of-the-night press release, the state  launched a website (mass.gov\stewardresources) with resources about the situation and set up a hotline for concerned patients and health care providers. The hotline is 617-468-2189 (local) or 833-305-2070 (toll-free).

Healey repeatedly called for patients to continue their appointments at Steward hospitals.

“We want people to hear from the Department of Public Health that it is safe to get care at Steward facilities, the facilities are open,” said DPH Commissioner Robbie Goldstein. “If you’re having chest pain, if you’re a pregnant person about to deliver, please go to the hospital that’s closest to you, the hospital that’s in your community.”

State officials are also working to review the proposed sale of Steward’s physician network to for-profit OptumCare. The proposed deal is to sell Stewardship Health Inc., the parent of Stewardship Health Medical Group Inc., which employs primary care physicians and other clinicians across nine states, to OptumCare, a subsidiary of UnitedHealth Group.

The state’s Health Policy Commission (HPC) said in late March that once all required information has been provided about the sale, the HPC will have 30 days to assess potential impacts of the transaction. Steward’s CEO Ralph de la Torre said the delay in that deal with OptumCare is one of the reasons for their bankruptcy filing.

The News Service asked Gov. Healey about Steward blaming their bankruptcy in part on the delay of the Optum deal.

“You know, one of the good things about bankruptcy is that Steward and its CEO and its management team will no longer be able to lie,” she said. “Transparency is really important here, and that’s why we look forward to seeing what is in the various documents that will be before the court, because we need transparency. We need clarity about debts and liabilities as we assess opportunities and restructuring as we go forward.”

Congressman Stephen F. Lynch told The Reporter he is closely monitoring the latest moves by Steward.

“I have four of the Steward Health Care hospitals in my district,” said Lynch, who represents the 8th district of Massachusetts. “I’m especially concerned about Norwood Hospital, which is under construction and not quite finished yet. There are also five other hospitals across the state that they own. It’s a huge number of beds within the state so that would affect all those communities as well.” 

When asked about the Carney in particular, Lynch said that “all of these hospitals are in the same boat, unfortunately.”

“Once you claim that bankruptcy, it sort of gives you some breathing space to try to figure things out,” Lynch told the Reporter. “At the end of the day, though, I’m not so sure there are enough assets there to satisfy all of the creditors. That’s problematic.”

He added: “We’ll have to wait and see how this proceeds. It might give us the ability to force some consolidation and mergers between healthy hospitals and the hospitals currently held by Steward Health Care but it’s too early to say.” 

In a statement issued Monday, US Sen. Elizabeth Warren blamed the Steward meltdown on “private equity vultures looting our health care system.

“After years of disastrous decisions, CEO Ralph de la Torre should be fired, along with Steward’s entire executive team,” she said. “Regulators need to seek all possible means to claw back the riches sucked out of these hospitals. No matter where they try to shift the blame, Steward executives are responsible for this crisis.”

Rep. Ayanna Pressley said Steward “has failed the tens of thousands of patients and workers” and called the filing for bankruptcy “another damning indictment of our for-profit healthcare system in America.”

“ This is a public health crisis for our communities—especially for the vulnerable patients who receive their care at Carney Hospital… and we must do everything we can to keep Steward hospitals open and care accessible,” Pressley said.