Senate investigation into Steward Health Care bankruptcy

Senate Health, Education, Labor, and Pensions Committee Chairman Bernie Sanders (I-Vt.) delivers closing arguments during a hearing to examine the immediate and long-term challenges facing public schools in the Capitol on Thursday, June 20, 2024.

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. In May, the company filed for bankruptcy and plans to sell all of its hospitals, but bankruptcy documents show that it paid millions of dollars to executives, including de Torre.

Chairman Bernie Sanders (I-Vt.) and ranking member Bill Cassidy (R-La.) announced Thursday that the committee will vote on July 25 on the subpoena to compel de la Torre to testify at a Sept. 12 hearing.

“Given the severe harm and uncertainty that Steward’s bankruptcy and financial arrangements mean for hospitals, patients and health care workers across the country, Dr. de la Torre has left 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 Boston Archdiocese hospital system in 2010, converted it into for-profit facilities with the support of private equity firm Cerberus Capital Management, and then bought up hospitals across the country.

Cerberus siphoned money from the hospitals and then sold all the land to a real estate investment company for more than a billion dollars and agreed to lease the hospitals back for millions of dollars annually. Steward used the money from the deal to finance further expansions, reportedly without investing in the existing hospitals.

Before the bankruptcy, Steward had also been sued by at least two dozen suppliers who claimed they had not been paid for supplies and services.

De la Torre was amassing his personal fortune at the same time. He lived in a Dallas enclave next to George W. Bush and Mark Cuban and reportedly owned a $40 million yacht and a luxury fishing boat. According to the committee, he received an estimated compensation of $16 million a year and Cerberus made a profit of $800 million.

In a separate statement, Sanders and Senator Edward Markey (D-Massachusetts) sharply criticized Steward and de la Torre, calling them classic examples of corporate greed.

“There could be no clearer example of this than the private equity vultures on Wall Street who make fortunes taking over hospitals, plundering their assets and lining their own pockets,” the senators said.

“Enough is enough. It is time for Dr. de la Torre to get off his yacht and explain to Congress how much he has gained financially while bankrupting the hospitals he runs,” Sanders and Markey said.

Several of Steward’s hospitals have been forced to close. Others have been unable to pay their health care providers or purchase supplies. Now communities across the country are at risk of losing their local hospitals.