As Steward CEO Defies Subpoena, Nurses Testify to Horrors of Private Equity Hospitals

The obscenely rich CEO of Steward Health Care, a for-profit network formed with private equity backing, violated a subpoena on Thursday by declining to testify at a Senate hearing on how mismanagement of the now-bankrupt hospital system harmed patient care.

But in Ralph de la Torre's absence, members of the Senate Health, Education, Labor, and Pensions (HELP) Committee did hear from nurses who witnessed firsthand how Steward's prioritization of shareholder payouts and lavish executive compensation left its hospitals in dire straights, with badly insufficient staffing and resources.

Ellen MacInnis, a longtime nurse at St. Elizabeth's Medical Center in Boston, said in response to a question from Sen. Chris Murphy (D-Conn.) that hospital conditions are "noticeably different" under private equity ownership.

"After Steward took over," said MacInnis, the hospital began "violating agreements" it made with nurses and "laid off all the nursing assistants on our maternity floors."

When Murphy said that "the purpose" of hospitals under Steward's ownership was apparently to "make the owners filthy rich," MacInnis responded, "Yes, absolutely."

Earlier in her testimony, MacInnis offered what she described as an "egregious and appalling example" of the incompetence and cruelty of Steward's management: "The failure of Steward to ensure a supply of bereavement boxes, which are the cases used to carry the remains of deceased newborns to the morgue."

"Instead, staff were expected to transport these remains in banker's and shipping boxes," said MacInnis. "To compensate for this indignity it was left to our own nurses to go online and purchase appropriate containers on Amazon."

The "most tragic example," MacInnis said, was the death of a 39-year-old mother "simply because the embolism coil that would have saved her life had been repossessed by another unpaid vender."

Watch the full hearing:

Steward has faced close scrutiny from lawmakers since it filed for bankruptcy in May after de la Torre and his private equity partners raked in massive sums of cash—making the for-profit network a stark example of private equity's parasitic impact on the U.S. healthcare system.

The Senate HELP Committee, led by progressive Sen. Bernie Sanders (I-Vt.), voted to subpoena de la Torre in late July after he refused to voluntarily appear before lawmakers.

The Steward CEO's defiance of the panel's subpoena led Sanders to announce Thursday that he "will be asking the committee to report a resolution to authorize civil enforcement and criminal contempt proceedings against Dr. de la Torre requiring compliance with the subpoena."

A hearing on the proposed contempt resolution is scheduled for next week.

"There's no incentive for a for-profit company that's looking to get every dime out of the hospital and all the services to add more nurses."

As The American Prospect's Maureen Tkacik noted last week, Steward "entered bankruptcy with $8 billion in debt while its CEO siphoned out more than a quarter-billion dollars and blew most of it on an epic midlife crisis, featuring a new wife 29 years his junior, a 500-acre ranch for her prizewinning racehorses, a $77,000-a-month detail for her security while traveling between the couple’s far-flung mansions, an Amalfi Coast wedding choreographed by Gwen Stefani and Blake Shelton’s wedding planner, and not one but two yachts."

Just ahead of Thursday's hearing, The Wall Street Journal reported that Steward paid out $790 million in dividends to shareholders years before filing for bankruptcy. Much of the $790 million went to the private equity giant Cerberus, which owned Steward between 2010 and 2020.

Nurses' testimony at Thursday's hearing made clear that such avarice came at the expense of healthcare workers and patients.

"There's no incentive for a for-profit company that's looking to get every dime out of the hospital and all the services to add more nurses," Audra Sprague, a former nurse at the newly shuttered Nashoba Valley Medical Center, told the Senate Health, Education, Labor, and Pensions (HELP) Committee during Thursday's hearing.

"They don't care how your day is," Sprague continued. "They're not there to actually help patients, they're there to make money."

After the hearing adjourned, Sen. Ed Markey (D-Mass.) held a press conference alongside nurses and other advocates in front of the U.S. Capitol Building.

Markey, a vocal critic of Steward, applauded the bravery of healthcare workers fighting for their patients in the face of private equity greed.

"Their courage," said the Massachusetts senator, "is matched only by Dr. de la Torre's cowardice."