Senate Health, Education, Labor and Pensions Chairman Bernie Sanders (I-Vt.) delivers his closing statement during a hearing examining the immediate and long-term challenges to public schools at 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 large presence in eastern Massachusetts, and will vote next week on whether to issue a subpoena for 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 of its hospitals. But bankruptcy documents show it has paid executives, including De Torre, millions of dollars.
Chairman Bernie Sanders (I-Vt.) and ranking member Bill Cassidy (R-La.) announced Thursday that the committee will vote on the subpoena on July 25, compelling De La Torre to testify at a hearing on Sept. 12.
“Given the severe damage and uncertainty Steward’s bankruptcy and the financial arrangements are causing to hospitals, patients, and health care workers across the country, Dr. De La Torre has left us no choice but to compel his testimony at this hearing,” Sanders and Cassidy said in a joint statement.
Steward took over the failing hospital system run by the Boston Archdiocese in 2010, backed by private equity firm Cerberus Capital Management, and turned it into a for-profit enterprise before buying 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 $1 billion, agreeing to lease it back for millions of dollars in rent each year. Steward used the money from the deal to fund further expansion, without investing in its existing hospitals.
Prior to the bankruptcy, Steward was also sued by at least two dozen vendors who alleged they were not paid for supplies and services.
De la Torre amassed his own personal fortune at the same time, living in a Dallas enclave with George W. Bush and Mark Cuban and reportedly owning a $40 million yacht and a luxury fishing boat. He received an estimated $16 million in compensation annually, according to the commission, and Cerberus made $800 million.
In a separate statement, Sanders and Sen. Edward Markey (D-Mass.) criticized Steward and De La Torre as classic examples of corporate greed.
“There could be no clearer example of this than Wall Street private equity firms making a fortune by taking over hospitals, stripping them of their assets, and lining their own pockets,” the senators said.
“Enough is enough. It’s time for Dr. De La Torre to get off his yacht and explain to Congress how much money he has made while the hospitals he runs are going bankrupt,” Sanders and Markey said.
Many Steward hospitals have had to close. Others have been unable to pay health care providers or buy supplies. Now, communities across the country face the prospect of losing their local hospitals.
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