Gov. Healey signs hospital legislation

Massachusetts Gov. Maura Healey signed House Bill 5553 last week that officially put Norwood Hospital owner Medical Properties Trust (MPT) on notice.

The legislation requires MPT to sell the property to a nonprofit operator by Nov. 1, or the state will take over the property and do it for the company. Healey said she hopes this is enough motivation for the company to finally ‘drop’ the property.

“Now, we need MPT to do the right thing and come to a reasonable agreement with a qualified operator who can rebuild the hospital. Our administration will be closely following their progress and will be prepared to act if MPT does not follow through,” she said in a statement.

If MPT doesn’t find a buyer, then the state will take the property by eminent domain and sell it to a nonprofit operator. The eminent domain law requires that the State pay a “fair price” for the property, but that price can be assessed much differently than a medical properties holding company. For instance, the state will likely only have to pay for what’s on the property now, which is an unfinished hospital. State Rep. John Rogers said in a previous interview with The Norwood Record – https://gvimes.link/nrwdhsptllaw – that it would be a pittance compared to what they could have gotten from a nonprofit company.

For its part, MPT replied to a request for comment from The Norwood Record on the legislation, but the response statement did not directly reference the legislation. Communications company Actum (one of MPT’s lobbying / PR firms) released a statement seemingly in response to comments from Congressman Stephen Lynch on the nature of for-profit medical companies.

“Congressman Lynch and MPT disagree about how hospital real estate should work in this country. That is a real policy debate, and it will not be settled in a press statement,” the statement read. “What we would ask is that Norwood be judged on what has actually happened at Norwood. Since the flood, MPT is the only party that has put money into this site. More than $350 million of its own capital, with no public dollars and no state appropriation.”

This assumes that Steward Health Care, the former operator of Norwood Hospital and early rebuilder for the new hospital, put no money into the reconstruction, despite being the face of the reconstruction project throughout the process that started in 2020.

The response statement continued, “When Steward stopped paying its contractors in early 2024, before the bankruptcy filing, MPT assumed those contracts and paid roughly $40 million owed to Massachusetts firms and to the tradespeople working on that site, so the work would not stop. On this property, capital has gone in, not out.”

However, the statement did say that MPT is not necessarily done paying to reopen the hospital.

“And on the outcome the Congressman cares about, there is no daylight between us,” the statement read. “Norwood should reopen under a qualified nonprofit operator. MPT is prepared to consider financing the completion of the operator-specific buildout.”

Town Manager Tony Mazzucco said that the Town’s separate pursuit of eminent domain is now on pause as the state’s mechanisms play out, but that’s not to say they’re on a break at Town Hall on this issue.

“We're going to take a pause specifically on pursuing eminent domain while we work through the state but otherwise continuing work,” he said. “We're not stopping until a hospital opens, So this just changes directions in a good way, but there is still a lot more work to do before a hospital opens.”

For those not aware of the history, Norwood Hospital shut down in 2020 due to catastrophic flooding. Norwood Hospital was formerly one of Steward Health Care’s most profitable hospitals; though the company was apparently “burning money” – https://gvimes.link/stwrdscm to acquire new hospitals and expand, to the point where it was the third-largest hospital chain in the country.

Steward sold its land to MPT in 2016, and MPT became its landlord for scores of medical facilities across the country. MPT promised to rebuild the hospital.

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Steward finally imploded, and everyone else was left holding the bag. It auctioned off its operator status – remember it didn’t own anything, just the metaphysical right to operate the hospitals it ran – and several companies took them up on it in several locations. But notably many Massachusetts hospitals were left in the lurch, including the Carney Hospital in Dorchester, Nashoba Valley Medical Center in Ayer, St. Elizabeth’s Hospital in Brighton, and of course, Norwood Hospital.

MPT rebuilt the hospital per Steward’s old filed plans, and apart from some weatherization that Steward failed to do, the work has been relatively on-schedule, at least according to MPT. When the shell of the hospital was finished, the feeling was that a sale was imminent.

But the sale was imminent for a long time.

It was reported in The Norwood Record that Rogers said at May’s Town Meeting – https://gvimes.link/nrwdhsptltm – that MPT was in talks with a hospital to buy the property in the fall of 2025, but when the $250 million asking price was agreed to, MPT allegedly jacked it up to $375 million. That hospital turned out to be Mass General Brigham, which is now facing its own issues with repercussions from the nurses’ strike.

Rogers said recently in the interview with the Norwood Record linked above that the hope is to get a new hospital open by 2028. He said that the state has agreed to fast-track an emergency determination of need (DON) for the Norwood Hospital when a new operator is found so there should be no regulatory hurdles for an incoming operator/owner.

That being said, the building is still a shell, and, like any such installation, the operator will have to fill out the inside of the building to its needs once it takes ownership of the property.