Sanders and Markey Joint Statement on Upcoming Vote to Investigate and Subpoena Steward Health Care on Bankruptcy
Editor’s note: This situation is, unfortunately, not unique to hospital and health care systems. As we reported previously, this is the exact same method that private equity companies use to suck the money out of nursing homes, as exposed by scientists at The Conversation. And it is the same method used in the Red Lobster bankruptcy debacle, where the real estate under all of the Red Lobsters was sold to the private equity firm who then charged the restaurants high rents on land they used to own. In addition to Senator Sanders and Senator Markey, Senator Elizabeth Warren has also made statements about this health care system, as reported by the Enterprise: “Regulators need to seek all possible means to claw back the riches sucked out of these hospitals. No matter where they try to shift the blame, Steward executives are responsible for this crisis”
According to a legal expert they interviewed, there isn’t really a way presently in the law for the government or the state to get back any of the money that was taken out of the hospitals to cause them to fail. As the senators mention in the statement and release below, the ones who suffer are the communities who are now likely to lose their neighborhood hospitals. Often such communities are rural in nature, and there is only one hospital in the whole area. The expert, John E. McDonough, said, “It depends on whether it turns to the criminal side. It would require action by the Department of Justice or the Federal Trade Commission…I don’t have high hopes for thoughtful and far-reaching resolution here. I think it’s going to be as quick and dirty as it possibly can. It’s probably going to represent a missed opportunity for the state.”
WASHINGTON – Senate Health, Education, Labor, and Pensions Committee Chairman Bernie Sanders (I-Vt.) and Subcommittee Chair Ed Markey (D-Mass.) on Thursday issued the following statement:
In America today, we have a dysfunctional and cruel health care system that is designed not to make patients well, but to make executives extraordinarily wealthy.
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.
Perhaps more than anyone else in America, Dr. Ralph de la Torre, the CEO of Steward Health Care, is the poster child for the type of outrageous corporate greed that is permeating through our for-profit health care system.
Working with private equity forces, Dr. de la Torre became obscenely wealthy by loading up hospitals from Massachusetts to Arizona with billions in debt and sold the land underneath these hospitals to real estate executives who charge unsustainably high rent.
As a result, Steward Health Care, and the more than 30 hospitals it owns in eight states, were forced to declare bankruptcy with some $9 billion in debt.
Several of Steward’s hospitals have been forced to close their doors. Others couldn’t pay their health providers or purchase life-saving hospital supplies. Now, communities across the country are grappling with the possibility of losing their local hospitals as a result of Steward’s gross financial mismanagement. Meanwhile, Dr. de la Torre received an estimated $16 million a year in compensation, and Cerberus, the private equity firm that he partnered with, made an $800 million profit.
Adding insult to injury, while patients and providers at Steward-owned hospitals suffered and his company careened towards bankruptcy, Dr. de La Torre received an estimated $100 million from his private equity enablers that he used to buy a $40 million yacht and a $15 million luxury fishing boat.
That is corporate greed at its most disgusting.
Time and time again we have invited Dr. de la Torre to come before Congress to testify about the financial mismanagement at Steward that led to one of the largest health care bankruptcies in our nation’s history. And time and time again, he has arrogantly refused.
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.
Next week, the HELP Committee will vote, on a bipartisan basis, to subpoena Dr. de la Torre, and to conduct a thorough and comprehensive investigation into the financial schemes that led to Steward’s bankruptcy. It is time for Congress to hold Dr. de la Torre accountable for his greed.
Sanders and Cassidy Announce Bipartisan Subpoena Vote and Investigation into Bankruptcy of Steward Health Care
WASHINGTON – Senate Health, Education, Labor, and Pensions Committee Chairman Bernie Sanders (I-Vt.) and Ranking Member Bill Cassidy, M.D. (R-La.) issued the following statement:
On Thursday, July 25th at 10:00 a.m., our committee will be holding a bipartisan vote to initiate an investigation into the bankruptcy of Steward Health Care. The committee will vote to compel Ralph de la Torre, the CEO of this company, to testify at a hearing we will be holding on this subject on September 12th.
On June 25th, we sent Dr. de la Torre an invitation to testify before our committee at a hearing entitled: “Examining the Bankruptcy of Steward Health Care: How Management Decisions Have Impacted Patient Care.”
Unfortunately, he declined to testify. 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.
We have a number of questions to ask Dr. de la Torre about the bankruptcy of Steward Health Care and the financial arrangements leading up to its insolvency. It is time for Dr. de la Torre to answer them before Congress and the American people.
Banner Image: Hospital care. Image Credit – Marcelo Leal
Senator Bernie Sanders
Bernie Sanders is serving his third term in the U.S. Senate after winning re-election in 2018. His previous 16 years in the House of Representatives make him the longest serving independent member of Congress in American history.