By Michelle Marchante, Ana Claudia Chacin
Miami Herald
HIALEAH, Fla. — Palmetto General Hospital is on life support.
Fewer patients and an exodus of specialists have left the more than 50-year-old hospital bare. The medical lifeline for thousands of patients in Hialeah and surrounding areas has been fighting to survive, according to interviews with hospital employees and their union representatives.
A new operator was recently tapped to run the hospital, which for months has struggled to provide care as its cash-crunched owner Steward Health Care tried to thin billions in debt after filing for Chapter 11 bankruptcy in May. However questions remain about the new operator’s ability to turn things around for the struggling facility.
Employees at Palmetto General and other hospitals that were owned by the for-profit Steward Health have long complained about a lack of supplies, layoffs, ward closings, service cuts, broken equipment, and delayed payments to vendors and staff. Earlier this year, North Shore Medical Center in North Miami-Dade closed its critical but costly labor and delivery, neonatal, and behavioral health units to try to slow the financial bleeding. At Florida Medical Center in Lauderdale Lakes, a lack of supplies and clinicians to provide on-call services to the ER forced the hospital to divert ambulances away for patient safety.
Steward Health CEO Dr. Ralph de la Torre recently resigned. His resignation came shortly after a congressional committee pursued civil enforcement and criminal charges against him for refusing to testify under subpoena about the alleged mishandling of the health system’s hospitals across the country. He’s filed a lawsuit to have the court rule the subpoena as invalid and unenforceable.
Meanwhile, the new operator of Palmetto General and four other Steward hospitals in South Florida — a Nevada-registered company called Healthcare Systems of America — is settling in.
But restoring the hospitals from their state of decline and regaining the trust of patients won’t be easy.
Empty ER, shortage of staff elsewhere
Palmetto General’s emergency room and its surgical unit, which are still open, have been in a state of disarray, with many of its employees resigning and some patients having to be transferred out of the hospital at 2001 W. 68th St., according to both medical personnel and union reps.
The hospital’s ER is accepting patients, but it doesn’t look like it used to, said Mark Criswell, an administrative organizer for 1199SEIU United Healthcare Workers East. Criswell, who spoke with the Herald in September, is part of a union that represents more than 450,000 healthcare workers across the country, including some at Palmetto General Hospital, North Shore Medical Center and Florida Medical Center.
During an early September visit to the Palmetto ER, a unit that has 41 beds, an inspector appointed to monitor care at Steward’s hospitals in Miami-Dade noted there were 12 patients getting treated.
Criswell said he saw only four patients being treated when he made his own visit several weeks later. The rest of the rooms were empty, with perfectly made beds, he told the Herald.
“It’s like it was abandoned. … I’ve never seen it like that,” said Criswell, who has walked the halls of the hospital for more than a decade.
Steward Health bought Palmetto General and four other South Florida hospitals — Hialeah Hospital, Coral Gables Hospital, North Shore Medical Center and Florida Medical Center — from Tenet Healthcare for $1.1 billion in 2021.
In May, less than three years after that purchase, Steward filed for bankruptcy, reporting over $9 billion in total liabilities, including nearly $1 billion in unpaid bills from its medical vendors and suppliers and $290 million in unpaid employee wages and benefits.
The bankruptcy process brought more scrutiny to the hospitals’ operations in recent months. In July, when inspectors went to check out Steward-owned hospitals in Miami-Dade, they noted Palmetto was experiencing a decline in elective and emergency surgeries from the emergency room. Suzanne Koenig, a patient care ombudsman appointed by the Justice Department’s U.S. Trustee Program to monitor care at Steward’s hospitals in Miami-Dade, noted in her report that while all of the inspected hospitals showed signs of disrepair, she “does not believe the security, safety, or care of the hospital’s patients are presently at risk.”
Those on ground level at the Hialeah hospital say Steward’s problems affected both staffing levels and the number of patients being seen at Palmetto General, concerns the new owner will have to confront. Unions representing hospital workers have spoken about staffing challenges, including the resignations of key staff members. The employees that remained were left navigating patient care with limited supplies and broken equipment, although the ombudsman, in a report filed last month, indicated that supply issues seemed to have improved across Steward’s hospitals in Miami-Dade and elsewhere during the bankruptcy process.
Koenig said the hospitals appeared to have “adequate supplies,” with supply rooms stocked enough “to provide safe patient care.” Most of Steward’s hospitals “are still in need of repairs and new or repaired equipment,” though she said she had “observed marked improvement” since her first report in July.
Under the bankruptcy conditions during Steward’s ownership, fewer patients were coming in this year, and registered nurses were sometimes told to work fewer hours or not come in at all, according to Lazaro Garcia, a registered nurse who works in Palmetto’s ICU and had some of his shifts canceled in September. Nurses on duty often had to fill in gaps from a shortage of nursing assistants, he said. Some have been picking up shifts at different hospitals to make up for lost wages.
Employees for months have worried about the future of the hospital and their jobs, he said. Some have had to use their paid time off to compensate for cut hours under the previous ownership, according to Garcia, who serves as Palmetto’s chief representative for National Nurses United, a union that represents more than 224,000 registered nurses in the country.
“The community should be proud of all the nurses of Palmetto that have stayed through the whole struggle” under Steward to provide patient care, Garcia said.
“Steward’s greed took a toll on nurses and patient safety. Nurses had to fight every day to get what everyone deserves,” he added. “We are hopeful that the new owners will focus on improving patient safety and will work to recruit and retain staff.”
Steward Health did not respond to the Herald’s request for comment. Aimee Gill, a spokesperson for Healthcare Systems of America, told the Herald in September that the new operator’s “number one priority is to provide stability and rebuild trust with the community.” The company did not respond to a more recent request for comment on the problems under Steward’s ownership described by hospital staff.
The lack of staffing up to this point has created unnerving situations for the patients still coming into the hospital, according to another employee, who recalled that on a day in September, there were eight patients needing open heart surgery at the certified cardiac hospital. Dr. Erik Beyer, a cardiovascular surgeon at Palmetto General who was chief of cardiac surgery for Steward’s Florida hospitals, had resigned at the end of August. But his replacement no longer performed complex open heart surgeries, and all of the patients had to be transferred to other hospitals — or they left on their own, against medical advice, when they learned Beyer was no longer working there, according to a doctor who spoke with the Herald on the condition of anonymity, in fear of career reprisal.
Koenig, the patient care ombudsman, noted the departure of a cardiothoracic surgeon in a report updating the court on the condition of the hospital following an early September visit.
“The senior leadership team shared that Palmetto recently lost a prominent cardiothoracic surgeon because of the restructuring; however, they remained positive given that other surgeons did not leave with this surgeon and given that Palmetto is interviewing new cardio-thoracic surgeons to the departed physician,” Koenig wrote.
Beyer is now in court trying to get a $848,550 bonus he says he’s owed after being strung along with false promises to keep him and his team employed by Steward. The hospital system has argued that the judge should deny the surgeon’s request for various reasons, including an ongoing external audit into physician bonuses and a contractual clause that says bonuses can only be disbursed to current employees. The Herald reached out to Beyer through his attorneys, who declined to make him available for an interview.
But Beyer told the Herald in a short phone call in early October that he was trying to come back to Palmetto under new ownership.
Problems before bankruptcy
The struggles at Palmetto General began long before Steward Health declared bankruptcy, according to hospital employees. Beyer, the cardiovascular surgeon, said in his claim in the bankruptcy case that he realized something was wrong under Steward’s ownership after vendors began complaining that they were “not getting paid in a timely fashion, and then not at all.”
“This was the first time I had ever heard of this happening at a healthcare company since this never happened at Tenet in the years I worked there,” the veteran surgeon with more than 20 years of experience said in a declaration that has since been sealed in Houston bankruptcy court.
Beyer said hospital administrators ignored concerns from staff about the lack of payments to vendors, who provide equipment, supplies, and nursing or anesthesiologist staff to the hospital.
Koenig, the patient care ombudsman, in her initial report, said supply problems also drove physicians away from Palmetto, even before Steward declared bankruptcy. A urologist, for example, had to move patients to another hospital because of an inability to obtain implants. Cardiologists were unable to obtain catheter supplies, and other surgeons could not get robotic supplies, Koenig wrote in her July report.
The supply strain impacted patient care, according to hospital employees.
“In the fall of 2023, Steward was unable to pay for anesthesia and we would go on emergency-only days, meaning no elective cases were to be performed, making all of our jobs that much more difficult and stressful,” Beyer said in his bankruptcy claim. “And I would be forced to have to explain to patients that we did not have either anesthesia or perfusion support, and their cases would be postponed.”
In November 2023, “concerned about its potential liability,” Steward gave Beyer and four other specialists permission to obtain privileges and perform surgeries at non-Steward hospitals if Palmetto General or other Steward hospitals “did not have the supplies needed to safely perform procedures,” according to Beyer’s court declaration.
Beyer’s attorneys said he performed more than 500 surgeries in 2023. Beyer alleges he could have done more procedures, but “Steward was unable to pay assistants, perfusionists, and anesthesiologists in the last two months” of 2023.
Other hospitals owned by Steward Health have experienced similar problems that have affected care, including Hialeah Hospital, Coral Gables Hospital, North Shore Medical Center and Florida Medical Center. The Boston Globe detailed the fall of Steward Health’s national empire and the toll it has taken on patients in Massachusetts and at a hospital in Melbourne, Florida.
“It has been a disaster since [Steward] came on board and has been declining every single day,” said the Palmetto doctor who spoke to the Herald, a sentiment that other employees have shared in previous interviews.
The doctor said that on a Friday night several weeks ago, a patient came in after a heart attack, and a heart assist device was placed on the patient through the groin. But when the patient’s leg lost circulation, they needed to be treated by a vascular surgeon — and there was none in sight, the doctor told the Herald. The vascular surgeon at Palmetto had resigned.
Another vascular surgeon had been given emergent privileges at the hospital, but he was unavailable. Ultimately, the assist device had to be removed, and the patient had to be transferred to another facility.
In September, the nurse who worked directly with the vascular surgeon who resigned was abruptly terminated because there were no cases for them to work on, the nurse told the Herald.
Other surgeries have been postponed or canceled because of lack of profusion team staffers, who operate the heart-lung machine while a patient is under anesthesia, the Palmetto General doctor said.
The doctor also told the Herald that over the summer, 11 surgical assistants were laid off. The number of total surgeries has decreased significantly, they said.
“This hospital used to do 40 to 50 cases daily. They are doing 10, at the most, [now]. As a consequence, every day they send nurses, scrub techs and surgical assistants home without pay because there are no cases to do.”
In September, the chief of the operating room was also laid off, according to the doctor who spoke with the Herald. The operating room chief did not respond to a call or a text message from a reporter.
The doctor told the Herald those were just examples they had direct knowledge of but noted that other departments in Steward’s South Florida hospitals were also dealing with an exodus of employees because of the lack of resources.
Criswell, the 1199SEIU Florida organizer, said that even with all its problems, Palmetto General still feels like a working hospital, unlike its sister North Shore Medical Center in North Miami -Dade, which is like a “ghost town.”
Even as the hospitals transition to new ownership, worries linger.
“Our concern is definitely the quality of care for the community,” Criswell said.
Transition to new ownership
Employees and patients waited months to learn the fate of their Steward hospitals, which were put up for sale as part of the company’s restructuring plan to thin its $9 billion debt.
But a souring relationship between Steward Health and Medical Properties Trust, the company that owns the land the hospitals sit on, complicated many of the sales.
The two eventually struck a deal in September that, among other things, named Healthcare Systems of America as “interim manager” of Steward’s hospitals in Miami-Dade and Broward.
The company was recently given the OK to serve as the permanent operator overseeing the day-to-day operations at Palmetto General and other Steward hospitals in South Florida.
Healthcare Systems of America, which was registered in August in Nevada, is managed by the same team that runs the Los Angeles-headquartered American Healthcare Systems, which describes itself as a community-based hospital system with facilities in North Carolina and Illinois.
On Sept. 30, Steward leadership sent Palmetto staff a memo outlining the leadership transition.
“I understand that the lack of communication has been a challenge around the transition causing a lot of anxiety, and we appreciate your extreme patience with getting through the daily water cooler or [ Palmetto General Hospital ] food mall rumor mill and navigating what is reported in the media,” wrote Brian Debarge, director of management operations at Steward Medical Group.
The president of Palmetto General, Alejandro “Alex” Contreras-Soto, will remain president but was also promoted to market leader of South Florida. Coral Gables Hospital, Hialeah Hospital and Florida Medical Center presidents will remain in their positions, according to the memo.
Physician contracts will be honored, and there are no plans to terminate any additional providers or close existing practices, Debarge wrote.
Some medical professionals who left the hospital could also come back. For example, Beyer, the cardiovascular surgeon who was battling Steward in court for the unpaid bonus, is expected to come back to his post. Beyer told the Herald in early October that under new ownership, it was not “officially official” yet but that he was in talks to return.
“Well, the new owners are here,” he said. “It’s a whole different vibe, and I love this place, I love Miami. I was born in Miami, and I love Palmetto, and I love the people here. I would love to come back here.”
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