Steward Healthcare, one of Massachusetts’ largest employers, is moving its headquarters to Dallas. I’m quoted on the subject in the Boston Globe (Steward Health Care to move top executives to Dallas)
“Steward was always a fish out of water in the Massachusetts health care scene as a for-profit, private-equity owned health care company,” said David E. Williams, president of the Boston consulting firm Health Business Group.
Williams said a corporate relocation to Dallas makes sense for the company: “It’s a less expensive place to do business, it’s more central, and it’s close to some new hospitals they’ve recently purchased and need to focus on.”
This move was no surprise, and has been rumored since November. The company will take up residence in a brand new office tower in Dallas.
A few thoughts:
- This is unlikely to be negative for Massachusetts. Only a small number of positions are likely to be moved, and many of the current job holders will be offered relocation packages. Anyone left behind is likely in a good position to find another attractive position
- The vast majority of Steward employees are in the local hospital communities. They will be staying along with their taxes and spending
- Steward hospitals will continue to pay property and other taxes as a result of their for-profit status. (They won’t be reverting to their non-profit, non tax-paying days from before the purchase)
The main reasons for the move seem to be to get closer to Steward’s center of gravity and to find a lower cost location, consistent with Steward’s overall low-cost philosophy. But there are a couple of warning signs for Massachusetts here:
- Steward’s decision makers are presumably aware of the proposed ballot initiative to impose a surtax on high income earners. Their move demonstrates that companies have options to help their executives avoid this tax
- No doubt Steward has been irritated by pressure from the Massachusetts government to surrender financial data that Steward felt should be private. Moving to Dallas is likely to relieve Steward of at least some of that pressure
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