What is happening with Steward Health Care?

Introduction

A Senate committee has initiated a bipartisan investigation into Steward Health Care, the largest physician-led hospital system in the U.S. Allegations have surfaced regarding the mismanagement of finances and potential risks to patient care.

Background

Steward Health Care, a for-profit entity operating 31 hospitals nationwide, is currently undergoing bankruptcy proceedings while attempting to sell its facilities. Community leaders in states like Massachusetts have criticized the company’s executives for excessive compensation amidst financial struggles.

Senate Concerns

During a recent committee meeting, senators expressed their discontent over what they termed “outrageous corporate greed.” They highlighted extravagant expenditures, including nearly $100 million spent on private jets, while hospitals faced financial difficulties.

Patient Care Risks

Senator Bill Cassidy (R-La.) shared a troubling incident where a woman died after childbirth due to a lack of necessary medical supplies, which had been repossessed because of Steward’s financial issues. “Patients’ lives are at risk. Americans deserve answers,” Cassidy stated.

Subpoena Issued

The committee voted to subpoena Ralph de la Torre, Steward’s CEO, after previous attempts to obtain his testimony were unsuccessful. His hearing is scheduled for September 12.

Luxury Purchases Amidst Crisis

Senator Bernie Sanders (I-Vt.) criticized de la Torre’s spending habits, including a $40 million yacht and a $15 million fishing boat, while hospitals struggled to remain operational. “It is time for Dr. de la Torre to explain the financial chicanery that enriched him while the hospitals went bankrupt,” Sanders remarked.

At Senate HELP committee right now: bipartisan vote on subpoenaing Steward Health Care CEO Ralph de la Torre. Senators allege de la Torre put profits — and his purchases — over patients as the system went bankrupt. @SenSanders: “The greed we are seeing here is quite extraordinary.” pic.twitter.com/mYzUQGvvVW

Private Equity’s Role

Democrats have pointed to private equity ownership as a contributing factor to Steward’s challenges. After a private equity firm acquired the hospital system in 2010, it took on new liabilities and sold the company back to physicians in 2020, leaving behind significant debts.

Legislative Actions

Senators Elizabeth Warren and Edward J. Markey have introduced legislation aimed at preventing the looting of health care entities for profit. They are advocating for increased transparency for private equity firms involved in health care.

Conclusion

The Senate committee’s investigation into Steward Health Care reflects growing concerns over corporate practices in the health care sector. As the situation unfolds, the focus remains on ensuring patient safety and accountability within the system.