Massachusetts Sen. Edward J. Markey is asking the head of Steward Health Care to testify before a U.S. Senate subcommittee field hearing taking place in Boston.
Markey, chair of the Senate Health, Education, Labor, and Pensions Subcommittee on Primary Health and Retirement Security, invited Steward Chairman and CEO Ralph de la Torre to attend and testify Wednesday, April 3, at a hearing that examines the impact of for-profit companies on health care access.
Steward Health Care, which operates Holy Family Hospital in Haverhill and Methuen, has reported an inability to pay some bills as a result of, what Markey said, previously accumulated debt. Steward was previously owned by Cerberus Capital Management, a private equity company that generated $800 million in profit from Steward.
The request for testimony follows last Friday’s statement from Southcoast Health CEO David McCready that his organization has a “strong interest” in buy St. Anne’s Hospital in Fall River from Steward.
“St. Anne’s patients and employees are part of our community; they are our family members, friends and neighbors,” McCready said in a message posted on the not-for-profit’s website. He added “The best option for St. Anne’s Hospital, its patients, its employees and our community, is for St. Anne’s to join the Southcoast Health family.”
No similar interests have been expressed publicly for Holy Family Hospitals.
Recently, Markey and Sen. Elizabeth Warren blasted de la Torre for “years of financial mismanagement, private equity schemes and executive profiteering that have led to Steward Health’s financial crisis.”
“Steward’s Massachusetts hospitals are in deep financial distress and appear to be in danger of closure because of years of mismanagement, private equity schemes, and executive profiteering. You have run this hospital system for 14 years, and reportedly have had access to two private jets while owning two luxury yachts,” said the lawmakers. “Meanwhile, suppliers were unpaid, the system piled on debt, and patients in Steward hospitals…suffered because of inadequate care. And now, as a result of years of failures by you and the private equity ownership at Steward, access to health care is at risk for Massachusetts communities, and thousands of health care workers’ jobs could be lost.”
The senators note, Cerberus invested in and created Steward in 2010 out of Caritas Christi Health Care, which de la Torre headed at the time. Steward then sold its hospital buildings to the real estate investment trust Medical Properties Trust in 2016 for $1.25 billion, “locking the system into massive rent payments that saddled the hospitals with crushing debt.”
They added, “in May 2020, Cerberus began its exit from Steward and transferred its stake to a group of Steward doctors, led by de la Torre. Steward borrowed an additional $335 million from its landlord, MPT, in January 2021 to finance the transaction, and took out another 2023 loan that quickly went bad, creating unsustainable levels of debt that precipitated the current crisis.”