By: Dan Diamond; Washington Post
Senators say executives at Steward, the nation’s largest physician-led hospital system, mismanaged finances and put patient care at risk.
Senators on the Health, Education, Labor and Pensions Committee echoed those concerns Thursday and said Steward warranted a national spotlight on Capitol Hill, accusing the hospital system’s leaders of “outrageous corporate greed” that harmed access to medical services, such as spending nearly $100 million on a pair of private jets. Lawmakers on the committee have been investigating the system for months.
“At a Steward-owned Massachusetts hospital, a woman died after giving birth when doctors realized mid-surgery that the supplies needed to treat her had been repossessed due to Steward’s financial troubles,” said Sen. Bill Cassidy (R-La.), a physician who is the panel’s top Republican. “Patients’ lives are at risk. Americans deserve answers.”
The committee previously sought testimony from Ralph de la Torre, the company’s CEO and founder, but had been rebuffed, prompting Thursday’s vote to subpoena him. The committee scheduled de la Torre’s testimony for a hearing on Sept. 12.
Steward did not immediately respond to a request for comment about the Senate vote and whether de la Torre would testify. A prominent cardiac surgeon in Boston, de la Torre had been hailed as a visionary after founding the hospital system in 2008 and promising to use his new organization to better coordinate care for patients.
Senators on Thursday alleged that de la Torre’s decisions resulted in new threats to patient care, rather than improving it. Sen. Bernie Sanders (I-Vt.), who chairs the committee, said the system’s leaders spent tens of millions of dollars on luxury purchases — such as de la Torre’s acquisition of a $40 million yacht and a $15 million fishing boat, the Boston Globe reported — even as their hospitals struggled to stay afloat.
“It is time for Dr. de la Torre to get off of his yacht, and to explain to Congress the financial chicanery which made him extremely wealthy, while the hospitals he managed went bankrupt,” Sanders said.
Democrats have argued that private equity ownership helped fuel Steward’s troubles, after a private equity firm in 2010 bought the then-struggling hospital system, took on new liabilities such as selling the company’s real estate holdings, and then sold Steward back to physicians in 2020, leaving the system burdened with new debts.
Sens. Elizabeth Warren and Edward J. Markey, the Senate’s two Massachusetts Democrats, introduced legislation this year to target owners who “loot health care entities” for profits. Markey and Rep. Pramila Jayapal (D-Wash.) on Thursday also introduced legislation that would impose new transparency requirements on private equity firms and for-profit companies that own health-care entities.
“This is a story of private equity, with no constraints, taking over a massive hospital system and then looting it for their own personal wealth,” Markey said at Thursday’s hearing.
Cassidy said private equity was not to blame for Steward’s problems, adding that de la Torre was responsible for the system’s day-to-day decisions. “Robust private equity investment kept the hospitals afloat in 2010,” Cassidy said.
The Senate committee voted 20-1 to open the investigation into Steward, with the lone dissenting vote coming from Sen. Rand Paul (R-Ky.). The panel voted 16-4 to subpoena de la Torre, with Paul and fellow Republican Sens. Tommy Tuberville (Ala.), Markwayne Mullin (Okla.) and Ted Budd (N.C.) voting against the measure, and Sen. Lisa Murkowski (R-Alaska) not voting.
