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Senators subpoena CEO to testify on Steward hospital closures

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Steward Health Care under investigation

Steward Health Care under federal investigation for fraud, corruption 03:27

Steward Health Care’s CEO Ralph de la Torre has for years avoided publicly responding to accusations that he profited at the expense of patients at the dozens of community hospitals around the country owned by the Dallas-based company. Now, he’ll have to face those questions on Capitol Hill after a bipartisan group of senators voted Thursday to launch an investigation into Steward and issued a subpoena to its reclusive chief executive. 

De la Torre, who one lawmaker called “the poster child” for corporate greed in health care, was ordered to testify at a public hearing on Sept. 12 before the Senate Committee on Healthcare, Education, Labor and Pensions.

“It is time for Dr. de la Torre to get off this yacht and explain his financial chicanery,” Sen. Bernie Sanders, an independent from Vermont, said before the vote.. 

“This is a story of private equity with no constraints taking over a massive hospital system and looting it for its wealth,” said Sen. Edward Markey, a Democrat from Massachusetts. “All I can say to Ralph de la Torre is you cannot treat communities as expendable. You are accountable, your day of reckoning is arriving.”

A spokesperson for Steward did not immediately respond for comment. Reached by phone on Wednesday ahead of the vote, the spokesperson declined to say if de la Torre would voluntarily agree to testify. 

“Steward Health Care has done everything in its power to operate successfully in a highly challenging health care environment,” de la Torre said in a company statement when it filed for bankruptcy reorganization in May. The company is currently exploring plans to sell all of its hospitals.

Dr. Ralph de la Torre
Dr. Ralph de la Torre Michael Nagle/Bloomberg via Getty Images

The Senate investigation is the latest attempt to hold de la Torre and his company accountable for its management of dozens of community hospitals across the country. Earlier this month, CBS News was first to report that federal prosecutors with the U.S. Attorney’s office in Boston are investigating Steward Health Care on allegations that include fraud and violations of the Foreign Corrupt Practices Act.

Steward has also been a focus of a nearly two-year CBS News investigation documenting how private equity and other investor groups have siphoned hundreds of millions of dollars from community hospitals with devastating public health consequences. 

A filing with the Securities and Exchange Commission from 2021 shows Steward’s owners paid themselves millions in dividends. Around the same time, de la Torre acquired a 190-foot yacht estimated to be worth $40 million. 

Meanwhile, CBS News reviewed records that showed how Steward hospitals around the country left a trail of unpaid bills, at times risking shortages of potentially life-saving supplies. In Massachusetts, a crucial medical device that could have saved a woman’s life was allegedly repossessed by the manufacturer because the company did not pay its bills. 

“They’ve taken money away from these hospitals that provide needed care and they’re using that money to line their own pockets.” Massachusetts Gov. Maura Healey told CBS News in February. “I’m disgusted. It’s selfish. It’s greed.”

The CBS News series also examined how Steward’s decision to sell off the land and buildings of a critical San Antonio hospital may have contributed to that facility’s closure. 

The company previously told CBS News that executives always put patients first and said they “deny that any other considerations were placed ahead of that guiding principle.” The company spokesperson said Steward “has actively and meaningfully invested” in its hospital system since its formation, including in Massachusetts, where it took over hospitals that were “failing” and “about to close.”

A monitor appointed by the judge overseeing the company’s bankruptcy recently surveyed Steward hospitals in four states. Her findings, filed with the court on Tuesday, included defective medical equipment, broken elevators, and staffing challenges, but determined there was no immediate risk to patient safety. 

In addition to bipartisan efforts to investigate Steward, a pair of Democratic lawmakers, Sen. Markey and Rep. Pramila Jayapal, of Washington state, on Thursday introduced a bill aimed at regulating the kind of financial transactions that de la Torre and his private equity partners engaged in. Similar legislation recently passed the Massachusetts state senate.

Markey called the Steward crisis a “symptom” of a health care system that prioritizes corporate interests over patient safety.

“Private equity firms and greedy corporate executives are using the health care system as a piggybank,” the senator said, calling for “permanent guardrails to protect patients, providers, and communities.” 

Michael Kaplan

Michael Kaplan is an award-winning reporter and producer for the CBS News investigative unit. He specializes in securing scoops and crafting long-form television investigations. His work has appeared on “60 Minutes,” CNN and in The New York Times.

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