The Bay State senior U.S. Senator says she will introduce legislation to prevent another Steward Health Care System crisis from happening in the future and that the law would claw back some of the money made by the company’s CEO.
U.S. Elizabeth Warren held a press conference in the shadow of Boston’s St. Elizabeth Medical Center on Tuesday, when she announced the “Corporate Crimes Against Health Care Act,” a bill aimed at ensuring private equity firms can’t sell the profitable parts of a hospital system out from underneath its patients.
According to the senator, the Steward story is one seen across business sectors, from Toys “R” Us to Red Lobster, but that when it comes to hospitals, there isn’t room for financial brinkmanship.
“When it comes to health care providers, the harm of private equity is literally a matter of life and death,” Warren said.
Warren, standing alongside the president of the Massachusetts Nursing Association and other healthcare workers, said that Steward Health Care CEO Dr. Ralph de la Torre made millions, and the equity firm Cerberus made hundreds of millions, by buying up hospital properties, selling the land underneath the buildings and then leasing the parcels back to the hospitals.
“Let me be clear, this disaster is private equities’ fault. Cerberus and Steward’s CEO, Ralph de la Torre, cut Steward’s resources so close to the bone that hospitals couldn’t afford life saving medical care,” she said.
Warren went on to tell the story of the death of a new mother, Sungida Rashid, whose delivery did not go as planned, and whose life could have been saved had Steward paid the bills required to have the right equipment on hand.
“What happened to those executives who made off with millions while this mother was left to die? Absolutely nothing,” she said. ““I’ll say it bluntly, turning private equity and corporate greed loose in our healthcare system kills people.”
“And it’s not happening just in Massachusetts, this looting is happening all across the country, from hospitals to nursing homes to provider practices. The corporate executives scoop up the cash and avoid any responsibility,” she said.
Her bill, she said, wouldn’t prevent or stand in the way of the current bankruptcy proceedings Steward is undergoing, but it would prevent other hospital systems from going down the same road under ownership by private equity.
It would also, she said, give the Department of Justice and state Attorneys General the ability to claw back some of the money that de la Torre has used to buy a pair of yachts.
“That’s right, Ralph, we will take back your yachts,” she said.
The proposal would also, Warren said, make it a crime to drive a hospital system toward bankruptcy such that a patient dies. A CEO could be charged with manslaughter and face a prison sentence in such a circumstance, under Warren’s plan.
“People go to prison for manslaughter when they recklessly put lives in danger, the same should be true for corporate executives if their actions cause people to die,” she said.
Warren said she has already spoken to several senate colleagues in other states hosting Steward hospitals and found support for her legislation.
Dallas-based Steward Health Care Systems began Chapter 11 bankruptcy proceedings at the start of May, following months of financial instability and while state monitors patrolled its hospitals to ensure adequate patient care. The company has announced it will auction off most of its hospitals, including the eight it currently operates in Massachusetts, at the end of June, with a sale hearing at the Bankruptcy Court of the Southern District of Texas scheduled for July 11.
Steward facilities in Massachusetts include Carney Hospital in Dorchester, Good Samaritan Medical Center in Brockton, Holy Family Hospitals in Haverhill and Methuen, Morton Hospital in Taunton, Nashoba Valley Medical Center in Ayer, Saint Anne’s Hospital in Fall River, and St. Elizabeth’s Medical Center in Brighton. Steward’s Norwood Hospital has been closed since 2020 due to flooding, and the company recently closed New England Sinai Hospital permanently.
A spokesperson for Steward did not immediately return a request for comment.