The Senate Health Committee voted almost unanimously Thursday to launch an investigation into Steward Health Care’s bankruptcy and subpoena its top executive to testify.
The vote marked the first time the committee issued a subpoena to compel testimony.
Steward Health Care CEO Ralph de la Torre is expected to face questions from the committee at a hearing on September 12.
De la Torre has for years faced accusations that he personally profited while Steward’s hospitals across the country failed financially, but has so far avoided any public response. He declined an earlier opportunity to testify, lawmakers said, and offered no counterdate or alternative company employee.
Members voted 20-1 to authorize the investigation and 16-4 to authorize the subpoena.
“Subpoenas should only be used when absolutely necessary, when all other efforts have failed, and the subpoena we are voting on today meets these criteria,” said the panel’s top Republican, Sen. Bill Cassidy (La.). “The decision to subpoena Steward is not an easy one, but the situation is actively affecting the patients and communities we represent.”
Committee chairman Sen. Bernie Sanders (I-Vt.) characterized Steward’s failure as an example of what happens when private equity firms get involved in health care.
Wall Street executives make “huge amounts of money by taking over hospitals across our country, putting them into debt and divesting them of their assets,” Sanders said.
“Perhaps more than any other person in America, a dubious distinction without a doubt, Ralph de la Torre, the CEO of Steward Health Care, epitomizes the kind of outrageous corporate greed that permeates our entire for-profit healthcare system,” Sanders said. . “The greed we are seeing here is extraordinary.”
Before the vote, Sanders showed photos of de la Torre’s $40 million yacht, $15 million luxury fishing boat and the company’s two corporate jets.
“It’s time for Dr. de la Torre to step off his yacht and explain to Congress the financial chicanery that made him extremely rich while the hospitals he managed went bankrupt. It is time for Congress to hold Dr. de la Torre accountable for his extreme greed,” Sanders said.
Steward took over a failed hospital system run by the Archdiocese of Boston in 2010 and backed by private equity firm Cerberus Capital Management, converting it into for-profit institutions before buying hospitals across the country.
Cerberus embezzled money from the hospitals and then sold all the land to a real estate investment company for more than $1 billion. The company agreed to lease them back for millions of dollars in rent each year. Steward used the money from the deal to finance further expansion, allegedly without investing in existing hospitals.
While hospitals struggled, to the point where bills weren’t paid and medical instruments were repossessed, owners paid millions in dividends.
But Cassidy responded that private equity was not to blame for Steward’s failure. The company went bankrupt due to corruption and mismanagement by top executives, he said.
“Steward is not a private equity firm. Private capital did not cause the situation we see today,” Cassidy said. “Blaming private capital for Steward’s mismanagement is not productive. It ignores that private equity invested hundreds of millions of dollars in failing hospitals, made them successful, and then sold them to a private management team that was not private equity.”
In a statement, Steward spokeswoman Josephine Martin said the company “will address the subpoena with the appropriate HELP Committee staff. We understand the desire for greater transparency around our journey and path forward,” referring to the Senate Health, Education, Labor and Pensions Committee. .
The company previously blamed low government reimbursement rates for its financial problems.
“Steward Health Care has done everything in its power to operate successfully in a highly challenging healthcare environment,” de la Torre said in a statement when Steward filed for bankruptcy protection in May.
The company is working to sell all of its hospitals during the bankruptcy process.
Updated at 12:42 pm EDT
This story originally appeared on thehill.com read the full story
