U.S. Sen. Elizabeth Warren said Tuesday she wants to bring new accountability to “corporate executives that loot our health care system.”
Warren announced new legislation across the street from St. Elizabeth’s Medical Center in Brighton. St. Elizabeth’s is one of eight Steward Health Care hospitals in Massachusetts that face uncertain futures after Steward filed for bankruptcy last month.
The Cambridge Democrat said her bill, dubbed the Corporate Crimes Against Health Care Act, seeks to make sure private equity firms and executives “understand they cannot come into our hospitals, suck all the value out of them, lavish the money on themselves, and leave behind an empty shell where people cannot get the services they need.”
“This looting is happening all across the country, from hospitals to nursing homes to provider practices, and the corporate executives scoop up the cash and avoid any responsibility,” Warren said. “I’ll say it bluntly: turning private equity and corporate greed loose in our health care system kills people.”
The bill, Warren said, would allow for health care executives to be sent to prison if their “looting” of a hospital or nursing home results in a patient’s death. It would also empower state attorneys general and the U.S. Justice Department to claw back compensation from executives who “loot” hospitals, according to Warren’s office.
A Steward spokesperson declined to comment on the bill.
Steward Health Care formed in 2010, when Cerberus Capital Management acquired a system of six nonprofit Catholic hospitals in Massachusetts. Cerberus owned Steward for about 10 years, then transferred its controlling interest in 2020 to a management group of Steward doctors, led by CEO Dr. Ralph de la Torre. Cerberus has said the system was “ financially healthy” at the time of the deal.
Ellen MacInnis, a nurse who’s worked at St. Elizabeth’s for 26 years, said she understands that private equity is about generating returns for investors.
“I have a retirement plan. I want to make some money. Of course. Who doesn’t want to do that?” she said after Warren’s press conference. “What I do begrudge is Steward taking so many resources away from us and making it so tough to take care of patients and so severely understaffing us to get us to the point where we’re having to make decisions and triage our resources.”
Warren’s bill, which she teased at an April State House hearing, would also add financial reporting requirements for health care entities and restrict hospitals that receive federal funding from selling their assets to real estate investment trusts.
Steward in 2016 sold the land under its hospitals to Medical Properties Trust, a transaction Cerberus has said both generated “a significant dividend” for its investors and de la Torre and gave the system $485 million to “invest in its healthcare platforms” and better deliver care.
That type of real estate deal has also caught the eye of state lawmakers. A sweeping health care reform bill the Massachusetts House passed last month would prohibit hospitals from leasing their main campus’ land from a real estate investment trust, grandfathering in those with existing lease agreements.
Meanwhile, state and federal officials are watching to see what happens as Steward’s bankruptcy proceedings play out in a federal court in Texas. Warren said her priority is ensuring “that patients and communities are put first” in that process.
Dr. Robbie Goldstein, the state’s public health commissioner, said Monday that his department is “making sure that we have the right resources in place to act should we need to.”
“I think the governor’s made it pretty clear that she would like to see Steward sell all of its facilities in Massachusetts to a new operator, and we are working with the governor and across the administration to make that happen,” Goldstein said. “We’re also prepared for whatever might happen in the next few weeks to months.”
The Massachusetts Nurses Association is calling for state government to use its power and resources “to ensure the survival” of Steward-owned hospitals, MNA President Katie Murphy said Tuesday as she spoke in support of Warren’s bill.
State Rep. Kevin Honan, who represents Brighton, said St. Elizabeth’s is a major employer and an “incredibly important institution to our neighborhood.”
“The local businesses depend on people from here shopping at their stores, going to their restaurants,” Honan told reporters. “They have, over the years, been big supporters of youth sports in this neighborhood, health care programs for seniors at the senior center. They’ve just provided a lot of services to this community.”
