When Steward Health and its landlord, Medical Properties Trust, reached an agreement last week to allow Steward more time to finalize deals to sell its hospitals, it appeared to be a lifeline.

MPT would pay the bills while Steward found buyers for hospitals including Trumbull Regional and Hillside. But are there potential pitfalls?

Niki Frenchko, Trumbull County Commissioner, said the county needs to use the time for due diligence to avoid a potential crisis a little further down the road. 

In a commissioner meeting Thursday, Denny Malloy, who serves as chair of the board of commissioners, questioned Frenchko after hearing her concerns about the trust placed in the landlord for Steward Hospitals. He and repeatedly accused Frenchko of wanting to let the hospital fail.

"What are you saying? You don't want to help the hospital with our money?" said Malloy.

Frenchko the county needs to be more actively involved, and argues Medical Properties Trust holds too much power and could overvalue their assets.

"I want to save the hospital, and I think we need to be doing everything we can, but it needs to be sustainable," said Frenchko.

The problem with that would be without some sort of control, the county could find themselves in the position of committing money to take over operations of the hospitals, only to have MPT set lease terms that would be too expensive to sustain .

It's important to remember that high rent payments was one of the main factors leading to Steward's bankruptcy in the first place. So if MPT remains the landlord, could a new owner potentially fall victim to the same fate?

"Concerning to move forward with them being the landlord, when they've shown the history that they don't put the investments back into the property. And steward had horrible complaints about them," said Frenchko.

In a filing related to some of Steward's other hospitals, stakeholders complained that MPT was interfering with bidders, trying to get more money than some hospitals are worth.

The fear is that with the new agreement, even though Steward and MPT appear to be working together, MPT will still hold all the cards. That's why, as we were first to report last week, Frenchko wants to slow down and involve the Governor's office in order to get a public health emergency declared. That would allow the county more options to make sure that whoever takes over the hospitals is not charged more than they should be.

Another of Frenchko's concerns raised was proper due diligence over what funds the county is legally permitted to commit, particularly because some Steward properties are across the county line in Mahoning county, meaning it may not be legal for Trumbull to commit county money to them. 

Malloy argued that the other commissioners have been doing their due diligence, holding meetings with stakeholders, some of whom have close ties to MPT, and going over the hospital system's financial records for certain years, although he acknowledged they are not looking at the most recent years due to a concern that they are inaccurately skewed due to the COVID pandemic.

Frenchko said that's exactly the problem and the county needs more assurances before committing public money.

Frenchko has held meetings with representatives from the Governor's office and the Ohio Department of Health, asking that they declare a public health emergency that would allow more flexibility for the county, including, among other things, the possibility of using eminent domain for the hospital buildings. In that event, neither MPT nor Steward Health would be the ones determining the value of the buildings or the terms of a lease. This would avoid concerns that they could be overvalued.