Sanders, Cassidy launch investigation into Steward Health bankruptcy
The Senate Health Committee is launching an investigation into the bankruptcy of Steward Health Care, a Dallas-based hospital chain with a significant presence in eastern Massachusetts, and will vote next week on issuing a subpoena to its CEO, Ralph de la Torre.
Steward operates 31 hospitals in eight states, including eight in Massachusetts. It filed for Chapter 11 protection in May and is looking to sell all its hospitals. But bankruptcy documents show it paid executives, including de la Torre, millions of dollars.
Chair Bernie Sanders (I-Vt.) and ranking member Bill Cassidy (R-La.) announced Thursday that the committee will vote on the subpoena July 25, to compel de la Torre to testify at a hearing Sept. 12.
“Given the serious harm and uncertainty Steward’s bankruptcy and financial arrangements are having on hospitals, patients, and health care workers throughout the country, Dr. de la Torre has given us no choice but to compel him to testify at this hearing,” Sanders and Cassidy said in a joint statement.
Steward took over a failing hospital system run by the Archdiocese of Boston in 2010, and backed by private equity company Cerberus Capital Management, converted it into for-profit institutions before buying up hospitals across the country.
Cerberus siphoned out money from the hospitals and then sold all the land to a real estate investment company for more than $1 billion, and agreed to lease them back for millions of dollars in rent each year. Steward used the money from the deal to finance more expansion, allegedly without investing in its existing hospitals.
Prior to the bankruptcy, Steward had also been sued by at least two dozen vendors who alleged they weren’t paid for supplies and services.
De la Torre amassed his personal wealth at the same time, living in a Dallas enclave alongside former President George W. Bush and Mark Cuban and reportedly owning a $40 million yacht and a luxury fishing boat. He received an estimated $16 million a year in compensation, according to the committee, and Cerberus made an $800 million profit.
In a separate statement, Sanders and Sen. Ed Markey (D-Mass.) blasted Steward and de la Torre as classic examples of corporate greed.
“There could not be a clearer example of that than private equity vultures on Wall Street making a fortune by taking over hospitals, stripping their assets, and lining their own pockets,” the senators said.
“Enough is enough. It is time for Dr. de la Torre to get off of his yacht and explain to Congress how much he has gained financially while bankrupting the hospitals he manages,” Sanders and Markey said.
Several of Steward’s hospitals have been forced to close their doors. Others couldn’t pay their health providers or purchase supplies. Now, communities across the country are facing the possibility of losing their local hospitals.