Steward Health Care CEO Ralph de la Torre, M.D., defied a subpoena to testify before Congress Thursday morning, leading heads of the investigating committee to promise civil enforcement and criminal charges for the executive.
During the summer, the Senate Committee on Health, Education, Labor and Pensions (HELP) had voted to issue its first subpoena in more than 40 years. Chairman Bernie Sanders, I-Vermont, said at the time that de la Torre needed to “explain to Congress the financial chicanery that made him extremely wealthy while the hospitals he managed went bankrupt.”
Sanders and committee Ranking Member Bill Cassidy, M.D., R-Louisiana, said Thursday that de la Torre’s legal team suggested he would be in attendance until they received a letter eight days ago. The letter informed the committee that he would not be attending out of concern that his testimony could harm the company’s ongoing bankruptcy proceedings. His legal counsel also suggested that the senators planned to turn their hearing into a “pseudo-criminal proceeding.”
The committee overruled the letter a day later and told de la Torre to show up anyway. He did not.
“We were hopeful that Dr. de la Torre would comply with our bipartisan subpoena and appear before the committee, to testify to the harm Steward has caused to patients, healthcare workers and the communities in which they live,” Sanders and Cassidy said in a joint statement after Thursday’s hearing. “Unfortunately, he failed to appear. We have no choice but to move forward and pursue both civil enforcement of the subpoena and criminal charges against Dr. de la Torre.”
The HELP Committee has been conducting an investigation into Steward Health Care’s bankruptcy, the decisions that led to its financial difficulties and the roles de la Torre and the system’s private equity backer, Cerberus Capital Management, played.
Though lawmakers from both parties have been firm in condemning the executive, Republicans have held off from tossing private equity under the bus. Sanders and Sen. Edward Markey, D-Massachusetts, whose home state has been heavily impacted by the bankruptcy, have been more willing to paint the bankruptcy as “one extreme example” of private equity’s involvement in the healthcare industry.
“The issue of private equity in healthcare is an issue this committee must look into,” Sanders said during the hearing. “We cannot allow wealthy private equity executives to treat our healthcare system as their own personal piggy bank.”
After de la Torre’s absence was noted, the committee moved on with testimonies from two Massachusetts nurses, Louisiana State Representative Michael Echols, a Republican, and Staci Mitchell, the mayor of West Monroe, Louisiana, and a board member of a Steward hospital.
The witnesses painted a broad picture of unpaid vendor bills, difficulty in providing adequate care and surrounding hospitals and communities having to pick up the slack.
When I hear my colleagues from across America here talk about the deficiencies in the healthcare system, it is glowingly clear to me that the executives of Steward Health are healthcare terrorists. They are killing our patients, they are killing our communities and they need to be held accountable.”
Louisiana State Representative Michael Echols
Ellen MacInnis, a former nurse at Steward’s St. Elizabeth’s Medical Center and a member of the Massachusetts Nurses Association board of directors, said the hospital frequently ran out of infant formula or access to late-night meals, forcing the nurses themselves to run to 24-hour convenience stores or share their own meals with patients.
She also recalled Steward failing to pay the vendor of bereavement boxes used to transport deceased newborns to the morgue, which forced nurses to carry the remains in cardboard boxes before staff bought bereavement boxes from Amazon on their own dime.
“Probably the most tragic, and what finally blew the lid off all this, was the death of a 39-year-old woman who came to the hospital for an absolutely normal childbirth,” MacInnis said during her testimony. “She was bleeding. She may have been saved by a device known as an embolism coil. There weren’t any in the hospital. There hadn’t been any in the hospital for weeks, they had been repossessed by the vendor. She died.”
Echols, the state representative, recalled an April hearing held in Baton Rouge, Louisiana, where nurses and other regional hospitals discussed the impact of Steward-owned Glenwood Regional Medical Center being unable to manage its patient volumes.
“They had to pick up the load when Steward and Glenwood were unable to keep up with the patient volume,” Echols said. “... They testified to the fact that it was tens of millions of dollars in additional costs that they were not able to recoup."
Also at that April hearing, Echols testified, Glenwood’s interim CEO Jo Turton admitted on the record that “Steward was solely responsible for not providing the financial resources that they needed to provide adequate care [in] that hospital. He also on the record noted that because of their mismanagement, they killed and maimed patients.
“When that interim leader, that Steward-hired executive, admits that on the record, we have a substantial problem,” Echols continued. “When I hear my colleagues from across America here talk about the deficiencies in the healthcare system, it is glowingly clear to me that the executives of Steward Health are healthcare terrorists. They are killing our patients, they are killing our communities and they need to be held accountable.”
Sanders wrapped the hearing with a warning for de la Torre.
"This is not the last discussion of this, and if Dr. de la Torre thinks that he is comfortable by not being here today, 'Dr. de la Torre if you're watching, you're wrong. This will be pursued,'" the chair said.
Bankruptcy proceedings push forward
Steward’s collection of hospitals have been up for auction over the course of its bankruptcy, with several deals greenlighted by the court within the past couple weeks.
Yesterday, U.S. Bankruptcy Court Judge Christopher Lopez authorized a deal with the system’s landlord, Medical Properties Trust, that will see 15 hospitals severed from Steward and transferred over to new operators. Steward sued MPT earlier in the bankruptcy process with allegations that it was undermining its sales process.
Under the deal, eight hospitals will be run by Healthcare Systems of America, three by Honor Health, two by Quorum Health and two by Insight Health. These new operators will not be required to pay cash rent through the end of the year to help facilitate the transfer.
Another arrangement to sell three “Space Coast” Florida hospitals and their underlying real estate to Orlando Health for $439 million also got the green light but will see Steward handing over proceeds remaining after post-closing obligations to MPT.
Other deals for six Massachusetts hospitals also recently received the court’s green light, though state officials have said that the Bay State will likely spend more than $489 million over three years to ensure the transition goes smoothly. Two other hospitals in the state had been shut down.
Massachusetts isn’t the only state pitching in—this week, a court filing revealed an agreement in which Pennsylvania will provide $4.5 million to keep Sharon Regional Medical Center’s operations running until a buyer is secured. Nearby Meadville Medical Center had previously submitted a letter of intent to do so.