Stewart Healthcare was, at one point, the largest private hospital system in the country.

When the private equity-backed network filed for bankruptcy last year, it devastated providers and patients.

In Massachusetts, five of the eight steward-owned hospitals were salvaged by the state, but two were shuddered.

Economics correspondent Paul Salman went to see what and how it happened.

At first, Hope.

We thought when they came in, great, we're going to have a bigger company.

They're going to put money into it.

Money from a rich and supposedly savvy private equity firm, Cerberus.

And the new hospital network, Stewart health care would be run by a noted

heart surgeon, Ralph De LaToree. For struggling hospitals, an injection of cash, plus medically-minded

leadership. A good match, right? It was just run so poorly and so mismanaged.

Elaine Graves was a nurse at Carney Hospital in Boston's relatively poor,

Dorchester, for nearly 50 years, before it's being shuttered last summer. Because, says Graves,

after Cerberus bought the hospital in 2010, things were being broken, elevators, they weren't

working, were down to one elevator. Audra Sprigg was a nurse at another

Cerbera Stewart Hospital. Over the years, it was one cut after the other and staffing cut. We were

on credit hold because we weren't paying our bills. The MO of private equity leverage buyouts,

the buyer, in this case Cerbera Stewart, goes to a lender for a many million dollar loan.

Gets the money, that's the leverage, which just means debt, which it then uses to buy properties like a hospital.

The property then has to pay off the debt.

One way to do that, cut costs, ignore bills.

People will come in for surgery. They couldn't get the equipment, so they had to send them home.

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