Over 250 employees are facing layoffs at St. Luke's Behavioral Health Center in Phoenix, as their parent company, Dallas-based Steward Health Care System, has signaled mass layoffs following a suspension of operations. Earlier this October, Steward Health Care filed a Worker Adjustment and Retraining Notification (WARN) with the state of Arizona, which was first reported by ABC15 News, indicating plans to terminate 259 positions at its Phoenix-based behavioral health facility.
The decision follows an order by the Arizona Department of Health Services in August, where St. Luke's was compelled to halt healthcare services due to a failed air conditioning system at a time when temperatures were hitting well into the triple digits; this creates a particularly harrowing environment within health care premises and the state's intervention highlights the infrastructural inadequacies that could have posed significant health risks not just to the patients, but also to the staff, the Business Journal detailed an account on this detriment. Additionally, Phoenix Business Journal reported that Steward Health Care System was already embroiled in a Chapter 11 bankruptcy filing, attempting to offload its hospitals to mitigate towering debts.
The plight of St. Luke's Behavioral Health Center further intensified when HonorHealth, a Scottsdale-based nonprofit health system, assumed operations of several Steward's hospitals, but crucially, not St. Luke's. “It was understood they had a more national strategy for what to do with behavioral health facilities throughout Steward's national footprint," HonorHealth CEO Todd LaPorte conveyed in an interview with Phoenix Business Journal, elucidating why St. Luke's wasn't included in the operational takeover. Consequently, employees of the embattled facility are left seeking employment elsewhere, as legal expertise from John Balitis, partner at Radix Law in Scottsdale, suggested to the Business Journal, emphasizing the role of the WARN notice in preparing workers for the impending reality of joblessness.
Back in 2017, St. Luke's Medical Center and the corresponding Behavioral Health Center fell under the expansive portfolio of Medical Properties Trust Inc. pacing the way for Steward to subsequently lease health facilities from the real estate investment trust, Phoenix Business Journal's examination of property records from Vizzda LLC framed a picture of a broader acquisition strategy gone sour, as Steward's debt surmounted and pushed the healthcare system into bankruptcy, where it then aimed to sell off assets including the health services that were eventually absorbed by other hospital operators such as HonorHealth in the Phoenix area.
