Average apartments, soaring rents | Border toll nuttiness | Another BPS bungle | Predictions of a Steward financial meltdown went unheeded | The growing split among Dems | Quick hits |
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Slow motion train wreck: Former top hospital exec predicted a Steward meltdown years ago but his warnings were ignored
The for-profit hospital chain’s financial prognosis is grim, with word of contractors and other vendors going unpaid having triggered a feeding frenzy in the local political and media worlds.
The fate of several crucial community hospitals owned by Dallas-based Steward Health Care, from Holy Family in Haverhill to the Carney in Dorchester to suburban Norwood Hospital, now hang in the balance.
But if our state’s political power brokers had heeded warnings more than a decade ago from an influential health care insider, we might not be in such a dire situation.
That would be Paul Levy. A true Renaissance man, Levy oversaw the cleanup of Boston Harbor as head of the MWRA. He later went on to serve for nearly a decade as head of Beth Israel Deaconess, all the while writing a popular blog on the health care system called “Not Running a Hospital.”
Levy penned some of the earliest warnings about Steward, the Wall Street-backed for-profit hospital chain that got its start gobbling up local hospitals run by Caritas Christi, a local financially troubled Catholic health care provider.
A decade before the you-know-what hit the wall, Levy had Steward’s number.
“Owned by a private equity firm, the hospital system’s leadership has done what private equity managers do,” Levy wrote in 2013, noting that “assets have been stripped away to create cash flow for the owner.”
By 2015, Levy was warning that Steward was headed towards a financial cataclysm as it started to sell off key pieces of its operations, such as its lab and testing services.
The “issue that could arise is what happens to the Steward hospitals if the system fails or falters,” Levy wrote, noting that the chain’s “hospitals are less resilient because a portion of their asset value has been sold off.”
A year later, Steward sold off its Massachusetts hospital buildings to an Alabama investment firm in a $1.25 billion deal, enabling Cerberus Capital Management, its big investment backer, to ride off into the sunset with more than $800 million.
The sale, in turn, set the fuse going on the financial crisis that has since engulfed Steward, with the for-profit hospital chain having used cash from the transaction to go an ill-considered national expansion campaign.
By last year, the wheels were coming off, with Steward struggling, unsuccessfully, to make back-breaking lease payments on its hospitals to its landlord, Birmingham-based Medical Properties Trust.
No one can credibly say they didn’t see this coming.
Levy wasn’t some gadfly, given that his healthcare blog had over 10,000 subscribers and was widely read in the industry.
Alan Sager, a professor of health policy, law and management at Boston University, was also out front in warning about the dangers of the investor-backed Steward taking over struggling community hospitals.
Yet over the course of nearly 15 years, three different governors, three different attorneys general, and several legislative leaders all failed to take effective action to rein Steward in.
It’s a group that includes our current governor, Maura Healey, who previously served as attorney general, as well as Martha Coakley, another former attorney general.
Sure, there was some minor squawking here and there and assorted hollow threats, but nothing that ultimately prevented Steward and its now uber rich CEO, Ralph de la Torre - he of the two yachts and squadron of corporate jets - from going their merry way.
“All these things were happening and were known to those in the hospitals and in the greater Boston healthcare world,” Levy told Contrarian Boston in a recent interview.
“If the government officials knew and didn't act, they are complicit in what ultimately happened,” contends Levy, who currently serves on the Newton School Committee and runs a consulting firm. “If they didn't know, they were not competently carrying out their legal responsibilities.”
Added Levy: “I don't know which is worse.”
Another BPS mess: Student applying to Boston exam school admitted to the wrong grade
It has become an annual rite of spring, the bungling of exam school applications by the Boston Public Schools.
And it looks like the admissions process for the city’s top three schools is already off to a stumbling start.
Shawn Aylward’s daughter, a sixth grader at a local parochial school, applied for a spot in the seventh grade class at one of Boston’s exam schools.
She listed the Boston Latin School as her first choice, followed by Boston Latin Academy and The John D. O'Bryant School of Mathematics and Science.
So both the student and her parents were mystified when a letter recently arrived with an offer of a seat in the incoming ninth grade class at the O’Bryant; she also was placed on the waiting list for BLA behind 83 other applicants.
The family had provided extensive residency documentation to BPS administrators, from her birth certificate to school grades.
Aylward, a graduate of Boston Latin School himself, is mystified as to how the mix up could have occurred.
“She is 12 years old - it is definitely very confusing,” Aylward told Contrarian Boston. “We went through this whole process and they can’t even get the grade right.”
The mishap comes on the heels of last year’s big screwup, when BPS erred in calculating the GPAs of some students, erroneously informing some they were ineligible to apply to the city’s exam schools, while giving a green light to others with lower grades who were ineligible.
It also comes amid a contentious diversity initiative by the district that has revamped the admissions system for Boston’s exam schools. The new system effectively guarantees spots for students in parts of Dorchester and Roxbury, while rejecting large numbers of students, including those with straight-A averages, hailing from sections of West Roxbury, the North End, and other middle class and more affluent neighborhoods
Aylward’s daughter, a straight-A student with a composite score of nearly 93, is a prime example.
After Aylward’s wife notified BPS of their mistake, an administrator left a voice mail message saying the middle schooler would be guaranteed a spot in the incoming seventh grade class at the O’Bryant.
However, while she was offered a seat the O’Bryant, she was removed from the wait list for BLA, her second choice.
An attorney at a local bank, Aylward said his daughter has decided not to go to O’Bryant and now plans to attend Ursuline Academy.
He still believes that Boston Latin School would have been a great fit for his daughter, who was excited about its theater and other arts programs.
Just the kind of student and family you would think that BPS, one of the worst urban school districts in the country, wouldn’t want to lose.
Ouch! CommonWealth Beacon story takes on “shadowy” nonprofit that has emerged as a key player in Boston politics
The Boston Policy Institute has made a splash, and in record time at that, having just been launched a few months ago by a pair of Democratic consultants.
BPI’s report on a potential $1 billion shortfall in city tax revenue from the collapse of the office market has stirred debate on a crucial issue - one that the Wu administration has doing its best to publicly downplay.
The CommonWealth Beacon story zeros in on the Boston Policy Institute’s refusal to disclose its donors. Fair enough.
And to its credit, the story does give BPI founder Greg Maynard a chance to defend the donor secrecy. Maynard noted that supporters might not otherwise feel comfortable giving money to the organization given the power Boston mayors typically wield.
However, we’d argue this is a legitimate issue worth exploring beyond just a few lines.
Debate over even the most basic of proposals was often curtailed in the Menino years. Business leaders and elected officials alike were fearful of saying anything that would irk the mayor, who was sensitive to the slightest sign of disrespect.
A similar fear of speaking frankly has now begun to emerge under Wu, who is also known to have a thin political skin.
The CommonWealth Beacon story also only makes a passing reference to one of the driving factors in the launch of the Boston Policy Institute - a growing philosophical divide in local and national Democratic Party politics.
Traditional liberals and moderates in the party have grown frustrated with the increasingly influential and uber progressive wing, of which Wu is a proud member.
There are a growing number of flashpoints between the factions, with housing a major one.
One major criticism is that Wu and other progressives are more concerned with the purity of their proposals than with practical results.
That means pushing for increases in subsidized housing beyond the point of feasibility - even at the risk of nothing getting built at all.
Borderline insanity: State transportation chief’s controversial proposal for toll booths on the state line just won’t die
Gov. Maura Healey has been scrambling to throw cold water on loose talk by her new transportation chief about state line toll booths.
In an interview Tuesday on WBUR, Healey put the kibosh on the idea, floated by her transportation chief, Monica Tibbits-Nutt.
But state Senate President Karen Spilka, a fellow Dem, either didn’t get the memo from the governor, or is ignoring it.
Spilka, in remarks to reporters on Monday, said she is intrigued by the idea and proposed it herself a few years ago, State House News Service reports.
Seems like the cost of living in Greater Boston is already crazy enough without adding new highway tolls to the mix.
And yes, the Boston area extends well beyond our state lines, encompassing both the suburbs of Southern New Hampshire and Rhode Island.
Hundreds of thousands of Massachusetts residents have moved to the border regions of both states in past decades in search of more reasonably priced homes, all the while commuting back to Boston and its environs for work.
So border tolls would effectively punish the middle class wage earners driven from Massachusetts by its overpriced housing market, while also likely convincing some to seek new jobs closer to home.
It’s already hard for Boston area businesses to fill jobs. A commuter tax on the state border is just what we need.
Tough news: With plans for new apartment buildings on hold, rents surge in Boston
That’s the word from Demetrios Salpoglou, CEO of Boston Pads, an online apartment and real estate platform.
The average rent in Boston has hit $3,269, a blended number that includes all different sizes of apartments.
That number, which covers tens of thousands of units, all in non-luxury buildings owned by smaller landlords, represents a more than 21 percent increase over two years.
Salpoglou blames the jump on the housing shortage, which has been particularly brutal in the rental sector thanks to years of underbuilding.
While the current availability rate is somewhat higher than this time last year, at just 5.27 percent, it’s nothing to brag about.
Meanwhile, apartment projects that could help ease the shortage and rein in runaway rents remain stuck on the drawing boards, and the culprit is more than the jump in interest rates and sky-high construction costs.
Boston Mayor Michelle Wu’s rollout of tougher new energy efficiency rules and demand for higher numbers of affordable apartments in new market rate buildings are also making it harder for developers to build.
The Wu administration has pushed back against such criticism, arguing that its mandate that 20 percent of all units in new apartment buildings be rented at below market rates has not even gone into effect yet.
In fact, projects with thousands of proposed apartments and condos have been laying dormant for years, when affordability requirements were lower.
But Salpoglou questions whether any affordability requirements are workable right now given the rocky financing prospects for new projects, with 20 percent a bridge too far.
As things stand now, interest rates would have to drop two or three percentage points in order for many of these projects to land financing and start construction, he contends. And with the Fed pushing even minor rate cuts, that’s not happening anytime soon.
Without the financing to break ground, developers are turning to him to sell their project plans and the city permits required to build them, Salpoglou said. All told, the projects he is being asked to sell total roughly 1,000 units.
“Supply is a huge issue,” Salpoglou said. “We are not producing enough housing. I have never had more development deals on my desk in my life - I have a stack four inches thick.”
Quick hits:
Questions abound about ousting of the Landmarks Commission chief: “Boston Mayor Michelle Wu fires head of commission that criticized her administration” Boston Herald
Drag racing in the Back Bay? Who knew! “‘It was pandemonium;’ Residents are stunned by late-night racing in Back Bay” Boston Globe
Almost there: “Hard-Fought Ukraine Aid Package on Verge of Passage” Wall Street Journal