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Steward to acquire Stoughton’s New England Sinai

Firm drawn to hospital’s post-acute care services

In its latest expansion move, fast-growing Steward Health Care System has agreed to buy New England Sinai Hospital, a 212-bed “post-acute care’’ site in Stoughton that treats patients recovering from serious illnesses or accidents after they leave other hospitals.

Steward, which already owns 10 community hospitals and doctors groups across Eastern Massachusetts, said it plans to use New England Sinai to strengthen its “continuum of care’’ and lower costs by moving patients from more expensive hospitals and reducing readmissions.

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“We want to be a long-term acute care provider not only for the Steward hospitals but for other facilities in the state,’’ said Josh Putter, chief operating officer at Boston-based Steward. “We’re really excited about being able to provide another level of care to our patients.’’

Judith C. Waterston, chief executive of New England Sinai, said its trustees concluded last year that it would be difficult to remain independent at a time of consolidation and payment changes in the health care industry. After hiring a consultant and talking to other potential merger partners, whom she declined to name, she said the trustees voted to join Steward.

“The leadership of Steward is very forward thinking,’’ Waterston said. “We think we can play a vital role in their network by offering post-acute care services. And we can help them reduce costs by keeping people out of acute care hospitals if they don’t need to be there.’’

Steward plans to retain all of New England Sinai’s employees. The hospital currently has the equivalent of about 620 full-time jobs. Its medical staff is made up of 291 doctors, including 42 full-time and part-time physicians it employs. The rest are independent community doctors and specialists who come to Stoughton and satellite sites to treat patients.

Because Steward is owned by private equity firm Cerberus Capital Management, it would have to convert New England Sinai from a nonprofit to a for-profit hospital. That will require a review by Attorney General Martha Coakley’s office and approval by the Department of Public Health, a process that could take three to six months.

‘The leadership of Steward is very forward thinking.’

Judith C. Waterston, CEO, New England Sinai
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Under their asset purchase agreement, Steward said it will invest at least $13 million to upgrade New England Sinai’s plant, fund its $10 million pension liability, retire $11 million in short-term debt, and extend a $3 million line of credit. “It will enable us to enhance our financial capabilities and make capital investments,’’ Waterston said. “And it will enable us to continue our mission to the community.’’

New England Sinai, which has satellite operations at Tufts Medical Center and Carney Hospital in Boston, has lost money for several years because of cuts in insurance reimbursements and pressure for shorter stays. Patients, some of whom require ventilators, are admitted for an average of 25 days before they go home or to nursing homes.

Treatment at post-acute care hospitals can account for half or more of the total cost of an episode of medical treatment, said Steven J. Tringale, managing director of Hinckley Allen & Tringale, a Boston health care consulting firm. Tringale said there are opportunities for emerging multi-institution “accountable care organizations’’ to improve efficiencies and bring down overall costs by better integrating post-acute care with other health care facilities.

“Having this kind of capacity is entirely consistent with Steward’s model,’’ Tringale said. “It not only gives them a bigger presence, but it becomes an asset for the rest of their network.’’

New England Sinai was founded in 1927 as the Jewish Tuberculosis Sanatorium in the Worcester County town of Rutland. It changed its name to New England Sinai and moved first to Boston’s Jamaica Plain neighborhood in 1954 and then to Stoughton in 1976. While it was founded by a group of Jewish women, it operates today as a nonsectarian hospital.

Steward currently refers patients to New England Sinai from its nearby hospitals, including Norwood Hospital, Good Samaritan Hospital in Brockton, Morton Hospital in Taunton, and Carney. Its acquisition is part of a broader plan to expand health care services outside of traditional hospitals. Steward recently took over Physicians Health Care, a home health care company with four sites in Massachusetts, including three that overlap Steward service areas.

Robert Weisman can be reached at weisman@globe.com.
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