PREPARED REMARKS: Sanders Leads Bipartisan Hearing on Steward Health, CEO Ralph de la Torre, & Private Equity Influence in American Health Care

Sen. Bernie Sanders (I-Vt.), Chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP), today led the committee in a hearing titled “Examining the Bankruptcy of Steward Health Care: How Management Decisions Have Impacted Patient Care.”

Ahead of the hearing, the committee authorized a subpoena in a bipartisan vote to compel Steward CEO Dr. Ralph de la Torre to appear today as a witness and provide testimony. This was the first subpoena issued by the HELP Committee since 1981. Despite the subpoena, Dr. de la Torre failed to appear today for the hearing.

Sanders’ remarks, as prepared for delivery, are below and can be watched live HERE:

The Senate Committee on Health, Education, Labor, and Pensions will come to order.

In America today, we have a health care system that is broken, dysfunctional and cruel.

Too often it is a system that is designed not to make patients well, but to make health care executives and stockholders extraordinarily wealthy.

There could not be a clearer example of that than private equity billionaires on Wall Street who are making billions by purchasing hospitals throughout our country, stripping all of their assets and loading them up with debt that they could never afford to pay back.

Perhaps more than anyone else in America, Ralph de la Torre, the CEO of Steward Health Care, is the poster child for the type of outrageous corporate greed that is permeating throughout our for-profit health care system.

Working in partnership with the private equity firm Cerberus, Dr. de la Torre became obscenely wealthy by loading up hospitals from Massachusetts to Arizona with billions of dollars in debt and selling the land underneath these hospitals to real estate executives at Medical Properties Trust who charged unsustainably high rent.

As a result of Dr. de la Torre’s elaborate financial scheme, Steward Health Care, and the more than 30 hospitals it owns in 8 states, declared bankruptcy with some $9 billion in debt.

But let’s be clear: Steward’s severe financial problems did not happen overnight. They have been going on for more than a decade.

It has been estimated that at least 15 patients at hospitals owned by Steward died as a result of a lack of medical equipment or staffing shortages and that at least 2,000 other patients were put in serious risk according to federal regulators.

Since 2019, federal inspectors have cited Steward-owned hospitals over 30 times for putting patients in “immediate jeopardy” – meaning that patients died, were put at “grave risk” or were injured.

In 2014, Steward shut down the Quincy Medical Center in Massachusetts with the exception of its Emergency Room – which it shut down six years later. Today, Quincy is the largest city in Massachusetts without an Emergency Room.

In 2018, Steward shut down the Northside Regional Medical Center in Youngstown, Ohio closing the only labor and delivery unit in that city for pregnant women and their babies and laying off 468 health care workers in the process.

Last year, Steward shut down the Texas Vista Medical Center, the main health care option for San Antonio's south side after it missed over $650,000 in payments to medical suppliers leaving the hospital with a severe shortage of respiratory masks among many other things.

Last month, state regulators required Steward to shut down St. Luke’s Behavioral Center in Phoenix, Arizona after they found that it had been without air conditioning as temperatures soared past 100 degrees putting more than 70 patients at risk of heat exposure.

Steward has also shut down pediatric wards in Massachusetts and Louisiana, closed neonatal units in Florida and Texas, and eliminated maternity services at a hospital in Florida.

We know that Steward has gone bankrupt. We know that several of its hospitals have already been forced to close their doors because they ran out of money.

But how is Dr. de la Torre doing financially? While hospitals shut down, while patients go without care, while health care workers lose their jobs, how has Dr. De La Torre been doing financially?

The reality is that Dr. de la Torre is doing phenomenally well.

While Steward was busy shutting down hospitals,

the companies he owns received $250 million in compensation over a 4-year period. Let me repeat, he personally received hundreds of millions of dollars, some of which he used to purchase this $40 million yacht. (Chart 1: Yacht.)

While Steward’s hospitals were severely understaffed, Dr. de la Torre was able to afford this $15 million custom-made, luxury fishing boat. (Chart 2: Luxury fishing boat.)

While Steward-owned hospitals could not afford to pay for life-saving medical supplies, it had enough money to purchase a $62 million private jet and, incredibly, a $33 million backup jet that Dr. de la Torre and his family used for non-business trips throughout the world. (Charts 3 and 4: Private jets.)

While Steward’s hospitals were laying off hundreds of workers, Dr. de la Torre made a $10 million charitable contribution to an exclusive prep school in Dallas that was fully paid for by Steward Health Care, not his own personal funds.

How many of Steward’s hospitals could have been prevented from closing down, how many lives could have been saved, how many health care workers would still have their jobs if Dr. de la Torre spent $160 million on high-quality health care at the hospitals he managed instead of a yacht, two private jets, a luxury fishing boat and a massive contribution to a wealthy prep school?

Today, we will be hearing from nurses in Massachusetts and from public officials in Louisiana who have first hand knowledge of the harm Steward has caused to patients, health care workers and the communities in which they live. I look forward to hearing from them soon.

As the Chairman of this Committee, I look forward to working with Ranking Member Cassidy, Senator Markey and every Senator to hold Dr. de la Torre accountable for his financial mismanagement and his greed.

But let’s be clear: Dr. de la Torre did not act alone.

Who else besides Dr. de la Torre benefitted financially as a result of Steward’s bankruptcy?

Cerberus, the private equity firm he partnered with, made an estimated $800 million profit from its investments in Steward Health Care.

From 2017 through 2021, the CEO of Medical Properties Trust received about $70 million in bonuses, stock awards and salary. How much of his total compensation came as a result of its financial arrangements with Steward?

The collapse of Steward Health Care is just one extreme example of the damaging role private equity is having on our health care system.

Private equity firms have bought up hundreds of hospitals, thousands of nursing homes, and tens of thousands of medical practices – saddling them up with unsustainable debt – and stripping their assets to make huge profits for their executives and investors.

Study after study has shown that, on average, when a private equity firm takes over a hospital, a nursing home or another medical provider, the price of health care goes up, the quality of health care goes down, and health care workers are asked to do much more work with fewer and fewer staff.

The issue of private equity in health care is an issue this Committee must look into. We cannot allow wealthy private equity executives to treat our health care system as their own personal piggy bank.

Health care in America must be a fundamental human right for all, not a privilege for the wealthy few.

Senator Cassidy, you are recognized for an opening statement.