Editor's Note: This story has been updated following the closing of the acquisition. This story originally published on August 13.
Steward Health Care sold its physicians network, Stewardship Health, to Rural Healthcare Group, which is owned by a private equity group.
As part of the deal, Kinderhook Industries, the private equity firm that owns Rural Healthcare Group, is rebranding the consolidated company to Revere Medical, Kinderhook Industries said in a press release.
The PE firm said the new name reflects "the combined company’s commitment to serving its providers, colleagues and most importantly patients, on its path to building the country’s most revered provider organization."
Headquartered in Nashville, Tennessee, RHG operates 17 clinics across two states.
Stewardship combines Steward Health Care Network and the primary care providers of Steward Medical Group.
The acquisition adds Stewardship's network of 5,000 employed and affiliated providers across nine states. Stewardship offers value-based care across complex Medicaid and commercial populations, managing 400,000 attributed lives, according to the company.
U.S. Bankruptcy Court for the Southern District of Texas Judge Christopher Lopez approved the acquisition in August. The Massachusetts Health Policy Commission said earlier this month that it had concluded its review and said federal regulators had approved the transaction.
Revere Medical plans to make investments in the legacy Stewardship infrastructure across people and technology. The physicians group said it will seek to ensure that care remains local so that patients can still access their existing providers, specialists, and hospitals.
“This is an exciting time for both Stewardship and RHG, now known as Revere Medical. Combining the organizations will allow for Revere Medical to accelerate the impact of our operating model across more providers, patients, and communities,” said Benson Sloan, CEO of Revere Medical, in a statement. “The next step is to integrate the two organizations while making further investments to bolster the delivery of care. As Revere Medical, our mission of improving the lives of people in underserved areas through high-quality care remains unchanged.”
Steward Health System signed a definitive agreement to sell Stewardship, one of the largest primary care provider organizations in the country, for a proposed purchase price of $245 million, according to court documents filed in federal bankruptcy court Aug. 12. The court documents (document 1953 and 1954) can be found on an online portal set up for court filings and other restructuring information about Steward Health Care.
RHG, an affiliate of PE firm Kinderhook Industries, will buy Stewardship through Brady Health Buyer, a company set up by Kinderhook to complete the transaction, according to court documents.
Kinderhook offered $245 million in cash for Stewardship, according to court documents.
Steward Health Care agrees to sell physician group to private equity affiliate in $245M deal
published Aug. 13
The transaction will result in "strong patient and physician outcomes," Steward Health Care executives said in a press release. Stewardship Health will continue to serve its loyal patient following in the Commonwealth of Massachusetts under new ownership, the health system said.
“As part of the ongoing Chapter 11 proceedings, following a robust and active bidding process, Steward Health Care is pleased to have reached an agreement with Rural Healthcare Group,” said Mark Rich, president of Steward Health Care, in a statement. “Kinderhook has over 20 years of experience investing in mid-sized health care businesses that serve the nations’ most vulnerable populations. Kinderhook’s investments are focused on protecting access to high-quality healthcare in communities that are truly underserved."
RHG is a "well-respected group of healthcare professionals that specifically focuses on underserved and underinsured areas," Rich said. "We are confident that Stewardship Health will continue its stellar treatment of the patient population as a result of this transaction," Rich noted.
RHG will bring its mission and approach to the state of Massachusetts along with the other states where Stewardship operates and supports primary care clinics, said Benson Sloan, CEO of RHG. "In many ways, RHG has directly preserved and restored primary care in our Tennessee and North Carolina markets as both independent providers and health systems have sought us out to ensure long-term continuity of care in their communities. A thriving primary care infrastructure is critical to supporting local hospitals and specialists, as primary care providers are instrumental in ensuring patients are directed to the appropriate facilities at the right time," Sloan said.
RHG plans to make significant investments in Stewardship's infrastructure, which will allow providers to continue seeing patients in existing clinics across the Stewardship network, the company said.
RHG's partnership will help keep healthcare local for patients. Further, the transaction will separate Steward Medical Group and Steward Health Care Network from Steward's hospital system; transitioning clinics from health-system-owned to independent is an area of expertise for RHG, according to the company.
The Massachusetts Health Policy Commission said in a statement that it has not yet received notice relating to Rural Healthcare Group’s proposed acquisition of Steward Medical Group and Steward Health Care Network but expects to receive notice and review the proposed transaction.
The HPC’s regulatory role requires that when a notice of material change is submitted, details of the proposal will be reviewed by the HPC to examine potential impacts on health care costs, quality, access, and equity.
“The dissolution and bankruptcy of Steward Health Care has been an unprecedented disruption for communities, patients, and health care workers in Massachusetts,” said HPC Executive Director David Seltz in a statement. “As we move forward past this crisis, the HPC’s rigorous market oversight role is essential to making important information transparent and protecting the residents of the Commonwealth.”
The sale cannot be completed until after the HPC’s review and any concurrent review by state or federal antitrust authorities.
The deal comes as Steward is scheduled to go before a bankruptcy court judge Friday on its plan to sell six hospitals in Massachusetts.
Steward Health Care, a for-profit that runs 31 hospitals in several states, is currently working its way through bankruptcy proceedings.
A potential deal to sell Stewardship to UnitedHealth Group’s Optum fell through. The deal, unveiled in March, was a cornerstone of the for-profit’s liquidation plans but had come under fire from prominent lawmakers and other critics of the two companies.