As Steward Health Care System carries out an aggressive plan to expand beyond its Massachusetts base, basic financial information about the company remains shrouded in secrecy.
The privately held Boston-based company has failed to submit information about its finances and merger plans, as required by state law, and it hasn’t paid a number of fines imposed for its lack of transparency.
It has not officially notified the state about its plans involving two big transactions: the pending acquisition of 18 hospitals outside of Massachusetts owned by IASIS Healthcare of Franklin, Tenn., and the purchase of eight hospitals from Community Health Systems Inc. that closed earlier this year.
The Massachusetts Health Policy Commission requires hospitals and other health care providers to submit price, quality, and other data about pending mergers to assess their effect on consumers. The commission mandates information for large out-of-state deals, even though it has a limited role in monitoring such transactions.
In addition, Steward remains locked in a dispute with another state agency, the Center for Health Information and Analysis, which collects financial information from all hospital systems in the state. Steward has not filed complete financial statements — which detail revenues, profits/losses, and debt — for the past three years, according to the center.
In a change from years past, the company this year also has stopped reporting data on its individual hospitals, including St. Elizabeth’s Medical Center in Brighton, Carney Hospital in Dorchester, and others, the agency said.
Steward has been slapped with $246,000 in fines from the Center for Health Information and Analysis, which it has not paid. The agency has recouped $50,000 through payments from other state agencies to Steward.
Officials at the two state agencies couldn’t provide reasons for why Steward has failed to submit the information. Steward declined to comment.
The lack of information makes it impossible to fully assess the company’s financial health as it seeks to become the largest private for-profit hospital operator in the country. It also creates a hurdle to verifying Steward’s often-repeated claim that it has “completed an historic turnaround” of the struggling Massachusetts hospitals it acquired seven years ago.
“They don’t want people to be able to look at this data and say [if] this turnaround is real,” said Nancy Kane, a professor at the Harvard T.H. Chan School of Public Health, who analyzed Steward’s past financial statements for the attorney general’s office in 2015.
“It reflects how privately owned companies often view themselves, which is it’s nobody’s business what they’re doing. It makes you think there’s something they’re trying to hide.”
Steward is backed by New York private equity firm Cerberus Capital Management. In 2010, it acquired the financially distressed Caritas Christi hospitals, which were run by the Archdiocese of Boston. Steward continued to grow in Massachusetts, but it also shuttered Quincy Medical Center in 2014. It runs nine hospitals in the state.
Last year, Steward sold its hospital buildings to a real estate investment firm, lining up $1.25 billion to help fund a national expansion. Within months, it had inked a deal to buy eight hospitals from Community Health Systems. That was followed quickly by the $2 billion deal with IASIS, which operates hospitals in Utah, Arizona, Colorado, Texas, Arkansas, and Louisiana.
Steward officials previously said the IASIS deal was expected to close this quarter, which ends in about 30 days.
State law, however, requires health care providers to give notice of significant mergers and acquisitions to the Health Policy Commission at least 60 days before they are completed.
“Following public media reports of the proposed transaction with IASIS, HPC reached out to Steward in mid-June and notified Steward that it is required to file a notice of the planned transaction,” commission spokesman Matthew Kitsos said in an e-mail.
The commission’s general counsel, Lois Johnson, has communicated by e-mail and phone with Steward officials, including David Morales, the chief strategy officer. One e-mail the commission released to the Globe in response to a public records request shows Morales telling Johnson, “I continue to process our conversation.”
The Health Policy Commission cannot levy fines, but it could choose to withhold certification for Steward’s accountable care organization, a term that refers to groups of doctors and hospitals that share the risks and rewards of managing the care of their patients. Steward and other health systems are developing ACOs for the state’s Medicaid program, called MassHealth.
If Steward doesn’t receive certification, its participation in the MassHealth accountable care program — and some of the funding that comes with it — could be at risk.
Meanwhile, the Center for Health Information and Analysis has been working with Attorney General Maura Healey’s office for more than a year to try to compel Steward to produce its annual financial statements. The company filed heavily redacted financial information for 2014 and 2015, and it has not produced any figures for 2016, agency spokesman Andrew Jackmauh said.
In addition, the company hasn’t turned in hospital-specific data for the past three financial quarters.
“Steward has not informed us of why it is withholding information previously provided to CHIA on a quarterly basis,” Jackmauh said in an e-mail.
The most recent numbers Steward released for its parent company — which includes hospitals, physician practices, and other lines of business — show that the company would have lost about $1 million on operations in 2015, if not for a change in employee pension plans. That was an improvement from 2014, when it reported a $75 million operating loss.Priyanka Dayal McCluskey can be reached at priyanka. firstname.lastname@example.org. Follow her on Twitter @priyanka_dayal.