Senate HELP Committee holds hearing on Steward’s bankruptcy

On September 12, 2024, the Senate Health Education Labor and Pensions (HELP) Committee held a hearing to examine Steward Health Care’s bankruptcy and the role of management decisions in impacting patient care.[1]

• The hearing, which was live-streamed and recorded, can be accessed here.
• PESP’s statement for the record can be accessed here.

In July, the HELP Committee issued a subpoena to Steward CEO, Ralph de la Torre, to testify to the Committee.[2] A week before the hearing, de la Torre sent a letter via his attorney to the committee’s chair, Sen. Bernie Sanders (D-VA), stating that de la Torre would not attend.[3]

PESP’s Director of Programs, Eileen O’Grady, speaks at a press conference hosted by Senator Ed Markey (D-MA) after the HELP hearing.

As expected, Ralph de la Torre’s chair set empty at the hearing. Chairman Sanders opened the hearing describing how Cerberus Capital Management, Medical Properties Trust, and executives like CEO Ralph de la Torre had pillaged the company, even as patients were put at risk and sometimes harmed, and even as hospitals were closing.[4] He juxtaposed Steward’s financial distress with Ralph de la Torres financial situation, highlighting the millions of dollars de la Torre received while Steward was struggling. In the backdrop, a staffer displayed photos of de la Torre’s $40 million yacht and $15 million custom-made luxury fishing boat.[5] Sanders’ remarks put private equity at the center of the conversation, arguing that private equity is playing a damaging role in our healthcare system.[6]

Ranking Member Senator Bill Cassidy (R-LA) steered away from a mention of private equity in his opening remarks, instead emphasizing Steward’s mismanagement by de la Torre and the need for answers from the absent CEO.[7]

The Committee invited four witnesses to testify about their experiences with Steward’s mismanagement of hospitals. Two witnesses were nurses from Steward hospitals in Massachusetts. The other two were politicians – a mayor and state representative – from Louisiana, where Steward’s Glenwood Regional Medical Center is in crisis.

The first witness was Ellen MacInnis, a registered nurse employed at St. Elizabeth’s hospital in Boston, MA[8] and who serves on the Massachusetts Nurses Association (MNA) Board of Directors.[9] MacInnis provided an emotional testimony about the impacts of Steward’s understaffing and failures to pay vendors, detailing how this resulted in the deaths of some patients and substandard care for many others. She shared how nurses had on multiple occasions bought supplies the hospital was out of and could not get more of because of Steward’s credit holds, including diapers, infant formula, and bereavement boxes for the remains of deceased newborns.[10]

Later during questions, she described the “moral injury” that nurses have experienced working in the deplorable conditions at Steward,

“The moral injury that occurs when you’re unable to do the one and only thing you want to do — and that’s to keep patients safe — but for the greed of Steward and the way they deliberately deprive me of my colleagues, my support system, my supplies, my equipment. I’m just worn out.”[11]

The second witness was another registered nurse, Audra Sprague, who was employed at Nashoba Valley Medical Center until its recent closure and served as MNA’s co-chair at the hospital. Her testimony echoed many of the issues MacInnis shared regarding severe understaffing and lack of needed medical supplies. She told the Committee:

“[Steward] portrayed us as a failing hospital with declining census to justify closure in the state but the narrative conceals that corporate executives have systematically deprived our hospital of essential resources for years, including not giving us consistent gastroenterology, general surgery, urologists, anesthesiologists, and as a result, Nashoba was forced to transfer our patients for care that we could no longer provide.”[12]

Staci Mitchell, the mayor of West Monroe, LA where Steward’s Glenwood Regional Medical Center is located, was the next witness. She described how the problems at the hospital had put strain on the region’s healthcare systems, with many patients having to travel farther to get the care they need. Her testimony emphasized how Glenwood is the largest employer in her community, and a closure of the hospital would have major consequences for workers and their families. Like the other witnesses, she mentioned Steward’s failure to pay vendors, sharing how a local landscaping business had reached out to her for assistance over a $72,000 bill Steward owed them, and how: “For a small business, with a family and dependents, and employees, that’s a lot of money and cut put them out of business.”[13]

The final witness was Louisiana state representative Michael Echols, who in his capacity as a state legislator spearheaded a state-level hearing about the issues surrounding Steward’s mismanagement of Glenwood Regional Medical Center. He shared some of the findings from this hearing, including that patients had gotten infections and even died because the hospital lacked the basic medical supplies needed to safely care for them.[14] He exclaimed, “It is glowingly clear to me that the executives of Steward Health [Care] are healthcare terrorists. They are killing our patients. They are killing our communities. And they need to be held accountable.”[15] His testimony specifically called out Medical Properties Trust’s role in the Steward crisis:

“Medical Properties Trust, coupled with Steward have facilitated a Ponzi-like scheme that to me has to be held accountable as well…I’m hopeful that this Committee, after this subpoena of the CEO who no-showed, can hold him accountable, can put him in jail because that’s where he deserves to be for stealing this money from all of our communities…I do want to make sure that after this panel is over that organizations like Medical Properties Trust cannot continue to fund other bad actors that are going to come right after Steward. Because this isn’t the only game in town. They’ve got people they’ve worked with for decades that will fund the same mismanagement…So I’m hopeful that this Committee, whether through new laws or through some form of oversight can make sure that that imbalance gets rebalanced and that we put logic and reason back in the healthcare delivery system.[16]

All four witnesses emphasized how Steward’s employees and clinicians persevered and gave the best patient care that they could given the impossible situation they found themselves in.

After the witnesses gave their prepared remarks, multiple senators issued their own remarks as well as asked questions of the witnesses.

Senator Ed Markey (D-MA) called attention to the patients in Massachusetts who died because of Steward’s systemic understaffing and supplies shortages, naming eight patients whose pictures were held up behind him by a staffer.[17] Markey also brought more attention to Ralph de la Torre’s already conspicuous absence by calling him a coward.[18] Ahead of the hearing, Markey’s office put out a damning report on how the corporate greed behind Steward has impacted patients, workers, and communities.

Senator Mitt Romney (R-UT) expressed concern about Steward’s mismanagement, highlighting problems that occurred at Steward’s former Utah hospitals and stating that Steward had endangered lives.[19] Romney, who co-founded private equity firm Bain Capital, did not mention private equity or Cerberus Capital Management in his remarks.[20]

Romney was the governor of Massachusetts from 2003 to 2007,[21] and his lieutenant governor from that period, Kerry Healey, now sits on the board of Apollo Global Management.[22] Apollo, a lender to Medical Properties Trust, currently owns the mortgages of eight Steward hospitals in Massachusetts.[23]Apollo also owns 220 hospitals through its two hospital chains, Lifepoint Health and ScionHealth, many of which have seen patient and worker issues.[24]

Senator Chris Murphy (D-CT) called attention to a similar crisis happening at Prospect Medical Holdings’ three Connecticut hospitals after their former private equity owner, Leonard Green & Partners, siphoned out millions of dollars. He exclaimed, “How have we let American capitalism get so off the rails, so unmoored from the common good that anybody thinks it’s OK to make a billion dollars off of degrading health care for poor people in Waterbury, Connecticut. A, how do you live with yourself? But B, why do we accept that as a country? This is just a choice to decide to commoditize our healthcare system in Connecticut, in Louisiana, in Massachusetts, in every state across this country.”[25]

PESP’s November 2022 report on how Leonard Green pillaged Prospect Medical Holdings can be accessed here.

The Committee is expected to vote next week on whether to hold Ralph de la Torre in contempt of Congress for his failure to appear at the hearing.[26]

The Private Equity Stakeholder Project submitted a statement for the record for the September 12 HELP hearing, which can be accessed here. The testimony emphasized the role of Cerberus Capital Management and Medical Properties Trust in the pillaging of Steward Health Care, arguing:

“While legislators and regulators scrutinize and investigate potential criminal wrongdoing among the various parties involved in Steward’s demise, it is imperative that we do not lose sight of the perfectly legal forms of pillaging that occurred based on the typical private equity playbook that has also been used elsewhere, which involves overleveraging companies, selling off real estate, and taking out dividends – all at the expense of patients.

We must ensure that private equity firms and hospital landlords do not evade accountability by hiding behind the deeds of individual healthcare executives. Every party that was involved in the pillaging of Steward Health Care, whether it was through legal or illegal means, must be brought to account.”

After the hearing, Senator Ed Markey held a press conference, where Randi Weingarten (President, AFT), Dr. Ellana Stinson (New England Medical Association), Eileen O’Grady (Director of Programs at the Private Equity Stakeholder Project), Ellen MacInnis (Massachusetts Nurses Association), and Audra Sprague (Massachusetts Nurses Association) spoke.

AFT President Randi Weingarten emphasized private equity’s role in Steward’s demise, saying “The Steward bankruptcy is Exhibit A of what we are deeply concerned about. It is exactly what private equity’s impact on healthcare is, and that flies in the face of patient care.”[27]

PESP’s Director of Programs, Eileen O’Grady also brought private equity to the forefront of the conversation: “What we’ve heard today about Ralph de la Torre and Cerberus Capital’s gutting of Steward is horrifying, but we must recognize that this is not a standalone case. It is simply the worst-case scenario of the private equity business model that is intensely focused on maximizing profit at all costs – and indifferent to the impacts it has on healthcare workers, patients, and communities.”

O’Grady closed her remarks by saying, “We have a lot of work to do to hold these people accountable. But if nothing else, let’s make sure that what has happened to these hospitals can never happen again.”

The full press conference can be accessed here.

Resources

[1] “Full Committee Hearing – Examining the Bankruptcy of Steward Health Care: How Management Decisions Have Impacted Patient Care.” Accessed September 12, 2024. https://www.help.senate.gov/hearings/examining-the-bankruptcy-of-steward-health-care-how-management-decisions-have-impacted-patient-care.

[2] Kaplan, Michael, and Sheena Samu. “Senators Subpoena Steward Health Care CEO Ralph de La Torre to Testify Publicly – CBS News.” CBS News, July 25, 2024. https://www.cbsnews.com/news/steward-health-care-ceo-ralph-de-la-torre-senate-subpoena/.

[3] LaPook, Jon, Michael Kaplan, and Sheena Samu. “Senators Expected to Hold Steward Health Care CEO Ralph de La Torre in Contempt – CBS News.” CBS News, September 12, 2024. https://www.cbsnews.com/news/steward-health-care-ceo-ralph-de-la-torre-senate-contempt/.

[4] From [15:20] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[5] From [20:19] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[6] From [23:18] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[7] From [24:35] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[8] “Full Committee Hearing – Examining the Bankruptcy of Steward Health Care: How Management Decisions Have Impacted Patient Care.” Accessed September 12, 2024. https://www.help.senate.gov/hearings/examining-the-bankruptcy-of-steward-health-care-how-management-decisions-have-impacted-patient-care.

[9] Massachusetts Nurses Association. “Board of Directors.” Accessed September 12, 2024. https://www.massnurses.org/about-mna/bod/.

[10] From [38:44] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw; Dayal McCluskey, Priyanka. “Senators Slam Steward Health Care CEO, Plan Contempt Vote.” Wbur.Org, September 12, 2024. https://www.wbur.org/news/2024/09/12/steward-ralph-de-la-torre-senate-hearing.

[11] From [1:03:43] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw (quoteedited for clarity)

[12] From [48:38] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[13] From [52:42] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[14] From {56:40] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[15] From {57:25] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[16] From {57:46] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[17] From {1:09:27] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[18] From {1:15:29] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw.

[19] Maxfield, Dilan. “Romney Delivers Remarks at Health Committee Hearing on Bankruptcy of Steward Health Care.” Mitt Romney (blog), September 12, 2024. https://www.romney.senate.gov/romney-delivers-remarks-at-health-committee-hearing-on-bankruptcy-of-steward-health-care/.

[20] Mitt Romney. “Biography.” Accessed September 12, 2024. https://www.romney.senate.gov/biography/.

[21] Mitt Romney. “Biography.” Accessed September 12, 2024. https://www.romney.senate.gov/biography/.

[22] Apollo Global Management, Inc. “Board & Executive Officers,” 2024. https://ir.apollo.com/corporate-governance/board-executive-officers.

[23] Vogel, Susanna. “Steward Loses Money on Massachusetts Hospital Sales; CEO Snubs Senate.” Healthcare Dive, September 5, 2025. https://www.healthcaredive.com/news/steward-massachusetts-hospital-sales-ceo-refuses-subpoena/726053/.

[24] Private Equity Stakeholder Project. “Apollo’s Stranglehold on Hospitals Harms Patients and Healthcare Workers.” Private Equity Stakeholder Project, American Federation of Teachers, International Association of Machinists and Aerospace Workers, January 11, 2024. https://pestakeholder.org/wp-content/uploads/2024/01/PESP__Report_Apollo_Lifepoint_2024.pdf.

[25] From {1:39:53] of Senate HELP Hearing (9/12/24) – Steward Health Care Hearing. Accessed September 12, 2024. https://www.youtube.com/watch?v=B5PHPCDI6Kw; Payerchin, Richard. “Senators to Steward Health Care Execs: ‘How Do You Live with Yourself’ When Gutting Hospitals, Communities, the American Health System?” MedicalEconomics, September 12, 2024. https://www.medicaleconomics.com/view/senators-to-steward-health-care-execs-how-do-you-live-with-yourself-when-gutting-hospitals-communities-the-american-health-system-.

[26] LaPook, Jon, Michael Kaplan, and Sheena Samu. “Senators Expected to Hold Steward Health Care CEO Ralph de La Torre in Contempt – CBS News.” CBS News, September 12, 2024. https://www.cbsnews.com/news/steward-health-care-ceo-ralph-de-la-torre-senate-contempt/.

[27] From [9:19] of Senator Markey Hosts Press Conference on Steward Health Care, 2024. https://www.youtube.com/watch?v=_94cod3iyXs.