A bipartisan group of senators want Steward Health CEO Ralph de la Torre, M.D., to answers questions on Capitol Hill about the management of the hospital system's facilities.

The Senate Health, Education, Labor and Pensions (HELP) Committee voted Thursday to launch an investigation into Steward Health Care's bankruptcy and issue a subpoena to de la Torre to testify at a public hearing. Senators say Steward executives mismanaged finances and put patients at risk.

"This is a story of private equity with no constraints taking over a massive hospital system and then looting it for their own personal wealth, allowing for the healthcare of the patients to wither while simultaneously enriching the individuals at the top," Senator Edward Markey, D-Massachusetts, said after the vote. 

It marks the first time the subpoena issued by the HELP Committee since 1981. 

The committee authorized both the investigation and the subpoena in bipartisan votes – 20-1 for the investigation, 16-4 for the subpoena.

After months of reported financial difficulties, Steward filed for bankruptcy on May 6. The system has been working through the courts to auction off its hospitals and other assets, including its physician group but has repeatedly pushed back deadlines and seen deal proposals disintegrate under regulatory scrutiny.

The proceedings have become a closely watched affair as patients, healthcare professionals and government leaders alike raised concerns of potential service interruptions among Steward’s facilities.

At the same time, lawmakers and government leaders have called attention to de la Torre's lavish lifestyle, such as a reported $40 million yacht, and accuse him of profiting at the expense of patients at the community hospitals that Steward owns.

"Perhaps more than anyone else in America, Ralph de la Torre, the CEO of Steward Health Care, epitomizes the type of outrageous corporate greed that is permeating throughout our for-profit health care system," Senator Bernie Sanders, I-Vermont, said before the vote. "Working with private equity executives, Dr. de la Torre became obscenely wealthy by loading up hospitals from Massachusetts to Arizona with billions in debt and selling the land underneath these hospitals to real estate executives who charge unsustainably high rent."

Sanders added, "It is time for Dr. de la Torre to get off of his yacht and explain to Congress the financial chicanery which made him wealthy while the hospitals he managed went bankrupt."

Steward, which owns more than 30 hospital in eight states, has more than $9 billion in total liabilities.

Markey said the public hearing slated for September 12 would be "historic." 

"It's going to put the focus on the role private equity is playing in the hospital sector. This is not taking over a widget company. It's not taking over a coffee company. This is where they take over hospitals and they apply the very same standards to those hospitals which they would apply to a widget company," Markey said. "All I can say to Dr. de la Torre is that you cannot treat communities as expendable. You are accountable. Your day of reckoning is going to arrive here on September 12."

Thursday, July 18

The Senate Health, Education, Labor and Pensions (HELP) Committee is on course to launch an investigation of Steward Health Care and its CEO Ralph de la Torre, M.D.

On Thursday the committee’s chair and ranking member, Sen. Bernie Sanders (I-Vermont) and Sen. Bill Cassidy, M.D. (R-Louisiana), announced that lawmakers will consider a vote to investigate the bankrupt for-profit health system and subpoena its top executive.

“We have a number of questions to ask Dr. de la Torre about the bankruptcy of Steward Health Care and the financial arrangements leading up to its insolvency,” the senators said in a joint statement. “It is time for Dr. de la Torre to answer them before Congress and the American people.”

Cassidy, in his own release, pointed to the “poor financial decisions and gross mismanagement” of Glenwood Regional Medical Center, a Steward hospital in his district, and the threat of patients potentially being denied care at the facility due to “Steward’s irresponsible business practices.”

“My goal is to ensure residents in the community served by Glenwood continue to receive the care they need and to get to the bottom of these problems to make sure they do not happen again,” Cassidy said.

Sanders and HELP Subcommittee on Primary Health and Retirement Security Chair Edward Markey (D-Massachusetts) released a separate joint statement with harsher language for the executive.

“Time and time again we have invited Dr. de la Torre to come before Congress to testify about the financial mismanagement at Steward that led to one of the largest healthcare bankruptcies in our nation’s history. And time and time again, he has arrogantly refused,” Markey and Sanders said in a joint statement. “Enough is enough. It is time for Dr. de la Torre to get off of his yacht and explain to Congress how much he has gained financially while bankrupting the hospitals he manages."

After months of reported financial difficulties, Steward filed for bankruptcy on May 6. The system has been working through the courts to auction off its hospitals and other assets, including its physician group but has repeatedly pushed back deadlines and seen deal proposals disintegrate under regulatory scrutiny.

The proceedings have become a closely watched affair as patients, healthcare professionals and government leaders alike raised concerns of potential service interruptions among Steward’s facilities.

The company’s ties to Cerberus Capital Management and strategic decisions that hobbled its financial stability in exchange for short-term payouts have also won harsh criticism from opponents of private equity and “corporate profiteering” in healthcare.

Cerberus made a reported $800 million profit when it exited the company in the year’s leading up to its bankruptcy. Court documents filed during the bankruptcy proceedings show de la Torre was paid about $5.2 million in salary, reimbursement and other compensation in the run-up to bankruptcy.

“Perhaps more than anyone else in America, Dr. Ralph de la Torre, … is the poster child for the type of outrageous corporate greed that is permeating through our for-profit healthcare system,” Sanders and Markey said in their statement.

Last week CBS News reported that Boston-based federal authorities had opened a criminal investigation into Steward based on allegations of fraud and violations of the Foreign Corrupt Practices Act. These allegations, per CBS’ anonymous sources, are tied to a criminal corruption probe being conducted in Malta surrounding a deal for Steward to run three of its state-owned hospitals.

The HELP Committee will vote on the investigation and subpoena on July 25.