NEWS: With Bipartisan Vote, Sanders Leads HELP Committee Investigation into Bankruptcy of Steward Health Care and Subpoenas Its CEO

This is the first subpoena issued by the HELP Committee since 1981

WASHINGTON, July 25 - As private equity's grip on the American health care system grows stronger and more dangerous, Sen. Bernie Sanders (I-Vt.), Chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP), today led the committee in a bipartisan vote to authorize an investigation into the bankruptcy of Steward Health Care and subpoena the company's CEO.

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

The subpoena - the first issued by the HELP Committee since 1981 - compels Dr. Ralph de la Torre, Steward's CEO and Chairman, to testify at a hearing on September 12 titled, "Examining the Bankruptcy of Steward Health Care: How Management Decisions Have Impacted Patient Care."

At the committee vote today, Chairman Sanders gave remarks, as did Ranking Member Bill Cassidy, M.D. (R-La.) and Subcommittee Chair Ed Markey (D-Mass.).

Chairman Sanders' remarks, as prepared for delivery, are below and can be watched HERE.

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Chairman Sanders' Opening Remarks, as Prepared for Delivery

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

Today, we will be holding a vote to authorize an investigation into the bankruptcy of Steward Health Care and to subpoena its CEO.

Let me begin by thanking Ranking Member Cassidy for our work together on this important issue.

And let me thank Senator Markey for his outstanding leadership on this matter, for holding the first hearing on this subject in the subcommittee that he chairs and for bringing it to our attention.

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

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

In my view, there could not be a clearer example of that than private equity executives on Wall Street making a fortune by taking over hospitals throughout our country, loading them up with debt, and stripping their assets.

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.

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.

As a result of Dr. de la Torre's elaborate Ponzi scheme, Steward Health Care, and the more than 30 hospitals it owns in 8 states, were forced to declare bankruptcy with some $9 billion in debt.

And let's be clear. While Steward Health Care declared bankruptcy just a few months ago, its severe financial problems have been going on for more than a decade.

Here are just a few examples:

In 2014, Steward shut down the Quincy Medical Center in Massachusetts laying off 700 health care workers with the exception of its Emergency Room - which it shut down six years later.

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

In 2019, Steward shut down St. Luke's Medical Center in Phoenix, Arizona laying off 655 health care workers.

Last year, Steward shut down the Texas Vista Medical Center in San Antonio laying off 827 health care workers.

This year, Steward shut down the New England Sinai Hospital in Massachusetts and a medical center in Southeast Texas.

It also "temporarily" shut down Norwood Hospital in Massachusetts-but then stopped paying the construction workers who were working on the project, making it unlikely that this hospital will ever reopen.

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

Its medical center in Louisiana is at risk of closure after being cited on multiple occasions for putting patients in "immediate jeopardy."

It has failed to reopen hospitals in Utah, Texas, and Florida even though Steward received hundreds of millions of dollars from private equity and real estate firms to serve patients in those states.

And on and on it goes.

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.

We know that communities that depended on these hospitals are worried about what this bankruptcy means for their future.

But here is what is particularly obscene about this whole situation.

In the midst of all of the crises that Steward's policies have had on hospitals and communities all over this country, Dr. de la Torre has been doing phenomenally well financially.

The hospitals he manages close down and he makes huge sums of money.

While Steward was busy shutting down hospitals all over America, Dr. de la Torre received a $100 million payday that he used to purchase a $40 million yacht.

While Steward's hospitals were laying off health care workers, Dr. de la Torre received some $16 million a year in compensation, enough to afford this $15 million custom-made, luxury fishing boat.

Now, I'm having a hard time understanding how the CEO of Steward could pay $15 million for a fishing boat while the hospitals he was in charge of managing were literally drowning in debt. But that is precisely what de la Torre has done.

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, here is something that I find pretty remarkable.

Apparently, one private jet was not good enough for Dr. de la Torre. So, what did his company do? It bought a back-up jet worth an estimated $33 million just in case its main jet broke down.

You literally cannot make this stuff up.

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 spent $150 million on high-quality health care instead of a yacht, two private jets and a luxury fishing boat?

We are here this morning because time and time again Senator Cassidy, Senator Markey and I have invited Dr. de la Torre to come before Congress to testify about the financial mismanagement at Steward.

And time and time again, he has arrogantly refused.

Well, today, we say enough is enough.

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.

It is time for Congress to hold Dr. de la Torre accountable for his greed.

Let's be clear. This is not just about Dr. de la Torre. Cerberus, the private equity firm he partnered with, made an $800 million profit from its investments in Steward Health Care. Where did that money go? Other than Dr. de la Torre, who else benefitted financially from these financial schemes?

Those are just some of the questions we will be asking.

Further, this is not just about Steward Health Care.

In America today, private equity firms own 460 hospitals - 22% of all for-profit hospitals in our country.

How many of these hospitals are being loaded up with debt in order to make a handful of executives at private equity firms even wealthier?

How many of these hospitals are in danger of being shut down?

How many patients are at risk because these hospitals may no longer afford to purchase life-saving medical equipment?

These are questions that the American people deserve to know. And these are questions that we must be asking.

Senator Cassidy, you are recognized for an opening statement.