Senators, Medical Workers Say ‘Corporate Greed’ Is Source of Steward Health Crisis

The struggling company’s situation is being used as a cautionary example of the impact of private equity on the health care industry, according to experts. The crisis surrounding Steward Health Care Systems in Texas was the focus of a congressional field hearing in Boston on April 3. The financial troubles of the for-profit health system have had a significant impact on Massachusetts, particularly on the nine hospitals it operates in the state. The company’s Chairman and CEO, Ralph de la Torre, chose not to attend a hearing criticizing “corporate greed” in health care, but a panel of industry professionals was present to share their concerns. Dr. Ellana Stinson, an emergency medicine physician and president of the New England Medical Association, highlighted the challenges faced by Steward’s facilities, including the closure of Quincy Hospital. She expressed concerns about the dwindling resources and services at the hospitals, making it difficult for her to provide quality care to patients. The situation at Steward is not unique to Massachusetts, as similar issues have been observed in hospitals across the country. Private equity firms, which often engage in leveraged buyouts, have been criticized for burdening hospitals with high levels of debt. The Private Equity Stakeholder Project, a watchdog organization, has found that a significant number of health care bankruptcies involve private equity-owned companies. In Steward’s case, the company was formed after a private equity firm acquired a hospital chain from the Archdiocese of Boston. The subsequent financial strains led to the sale of its Massachusetts properties in 2016. Senators Ed Markey and Elizabeth Warren criticized the actions of Steward and its former owner, Cerberus Capital Management, for prioritizing profits over patient care. The company’s recent efforts to transfer ownership of its hospitals and sell its physician network have faced backlash from lawmakers and the public. The Biden administration has launched an investigation into private equity acquisitions in the health care sector. Despite criticisms, supporters of private equity argue that the industry has played a positive role in improving health care in the U.S. Private equity is committed to making strategic investments in the health sector to promote advancements, foster life-saving innovations, and bolster the jobs of over 260,000 dedicated employees at companies based in Bay State.

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