As more than 30 hospitals in the Steward Health Care System scrambled for money to cover equipment, closed pediatric and neonatal units, closed maternity wards, laid off hundreds of health care workers and put patients at risk, the system paid out at least $250. million to its CEO and his companies, according to a report by The Wall Street Journal.
The newly disclosed financials put even more scrutiny on Steward CEO Ralph de la Torre, a Harvard-trained heart surgeon who took a majority stake in Steward in 2020 from private equity firm Cerberus. De la Torre and his companies are said to have been paid at least $250 million since that takeover. In May, Steward, which has hospitals in eight states, filed for Chapter 11 bankruptcy.
Critics, including members of the Senate Health, Education, Labor and Pensions (HELP) Committee, say de la Torre took assets from the system’s hospitals, siphoned payments from them and saddled them with debt while receiving large payouts that. made him filthy rich.
Alleged greed
For example, de la Torre sold the land under the system’s hospitals to a large hospital owner, Medical Properties Trust, leaving Steward Hospitals on the hook for large rent payments. Under de la Torre, Steward also paid a management consulting firm $30 million a year to “provide management oversight and overall strategic direction.” But de la Torre was the majority owner of the consulting firm, which also employed other Steward executives. As the WSJ said, Steward effectively paid Steward’s executive management services to its CEO’s company, which employed Steward’s executives.
In 2021, when the COVID-19 pandemic strained hospitals, Steward distributed $111 million to shareholders. Since de la Torre owned 73 percent of the company at the time, his stake would have been about $81 million, the WSJ reported. That year, de la Torre bought a 190-foot yacht for $40 million. He also owns a $15 million custom-made luxury fishing boat named Jaruco. The Senate Appropriations Committee notes, however, that Steward’s affiliate owned two planes, one worth $62 million and the other a $33 million spare.
In 2022, de la Torre got married on Italy’s Amalfi Coast and bought a 500-acre Texas ranch for at least $7.2 million. His new wife, Nicole Acosta, 29, is a competitive equestrian who trains at a facility near the ranch. He races a horse that sold for $3.5 million in 2014, though it’s not clear how much the couple paid for it. In addition to the ranch, de la Torre, 58, owns an 11,108-square-foot mansion in Dallas worth $7.2 million, the WSJ reported.
While de la Torre was living an opulent lifestyle, Steward’s hospitals were facing tough times — as they had been for years. An investigation by the Senate HELP Committee found that Steward closed several hospitals in Massachusetts, Ohio, Arizona and Texas between 2014 and this year, laying off thousands of health care workers and leaving communities in dire straits. It closed several Massachusetts and Texas children’s wards; In Florida, it closed neonatal units and eliminated maternity services. In Louisiana, Steward’s patients faced “imminent danger.”
“Third World Medicine”
At a hearing in July, Sen. Bill Cassidy (R-La.), a ranking member of the HELP committee, spoke about conditions at Glenwood Regional Medical Center in West Monroe, Louisiana, which Steward allegedly mismanaged. “According to a report from the Centers for Medicare and Medicaid Services, a Glenwood doctor told the Louisiana state inspector that the hospital practiced ‘Third World medicine,'” Cassidy said.
What’s more, “one patient died while waiting to be transferred to another hospital because Glenwood did not have the resources to treat them,” the senator said. “Unfortunately, Glenwood is not unique,” he continued. “At a Steward-owned Massachusetts hospital, a woman died after giving birth when doctors realized mid-surgery that supplies needed for her treatment had been withdrawn earlier because of Steward’s financial woes.” The hospital reportedly owed $2.5 million in unpaid bills to a supplier.
In addition, a WSJ investigation unearthed documents showing that a pest control company discovered 3,000 bats at a hospital in Steward, Florida. A Phoenix-area hospital in Arizona had no air conditioning during scorching temperatures and its kitchen was closed due to health code violations. The state ordered it closed last week.
“The poor financial decisions and gross mismanagement of the hospitals by Dr. de la Torre and his management teams is shocking,” Cassidy said. “Patients’ lives are at risk. The American people deserve answers.”
Resentment
Senate HELP Committee Chairman Bernie Sanders (I-Vt.) went further, saying that the U.S. health care system “is not designed to make patients get better, but to make health care executives and shareholders extraordinarily rich. … Perhaps more than In America, Steward Health Care CEO Ralph de la Torre embodies the outrageous corporate greed that permeates our for-profit health care system.
Sanders lamented how de la Torre’s payouts could have benefited patients and communities instead, asking, “How many Steward hospitals could have been prevented from closing, how many lives could have been saved, how many healthcare workers would still have jobs if Dr. de la Torre spent $150 million on quality healthcare instead of a yacht, two private jets and a luxury fishing boat?”
On July 25, the commission voted 16-4 to subpoena de la Torre so they could ask him such questions in person. So far, de la Torre has refused to voluntarily appear before the committee and declined to comment on the WSJ report. The commission’s vote marks the first time since 1981 that it has issued a subpoena.
Steward and de la Torre are being investigated separately by the Department of Justice over allegations of fraud and corruption in a contract to manage hospitals in Malta.
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