Steward Health Care will lay off about 1,200 workers in Massachusetts by the end of the month as it moves to close two hospitals in the state.
The health system will let go 753 employees at its Carney Hospital and 490 workers at its Nashoba Valley Medical Center, according to a Worker Adjustment and Retraining Notification (WARN) report filed with state regulators on July 29.
On Thursday, a federal judge cleared the way for embattled Steward Health Care to close Carney Hospital and Nashoba Valley Medical Center by the end of August. Those are two of the eight hospitals that the health system operates in the Bay State.
U.S. Bankruptcy Judge Christopher Lopez also approved a request from Steward to reject a lease agreement that Steward and Massachusetts officials say has stalled the process of transferring Steward hospitals to new owners.
Dallas-based Steward filed for Chapter 11 bankruptcy in the Southern District of Texas in early May. The health system has been working to sell off its 31 hospitals and physician group, Stewardship Health.
The bankrupt health system announced last week it planned to close the two hospitals saying it lacked the funds to keep them open and failed to receive qualified bids.
Carney Hospital is located in Dorchester, Boston's largest and most populous neighborhood, while Nashoba Valley Medical Center is in Ayer, Massachusetts, a rural part of Middlesex County,
According to court filings, the two hospitals operate at a loss and serve a limited patient population. Carney, which employs about 903 people, has accrued a loss of $14.7 million in earnings before interest, taxes, depreciation and amortization (EBITDA) from January to May, according to the July 26 filing. Nashoba Valley employs 562 people and had a year-to-date EBITDA loss of $2.3 million.
The other six Massachusetts hospitals operated by Steward have accrued EBITDA losses of more than $63 million from January through May, the filing states.
Massachusetts officials have offered $30 million in advance Medicaid payments to help the hospitals continue operating — but only if Steward signs sales agreements for its remaining five hospitals, WBUR reported. The funding offer will be discussed at a hearing scheduled for Tuesday, August 6.