Senate Holds Steward Health Care CEO in Contempt Amid Bankruptcy Probe
U.S. Senate votes to hold Steward Health Care CEO in criminal contempt for refusing to testify about hospital cost-cutting. First such action since 1971, as bankruptcy investigation unfolds.
The U.S. Senate has taken a rare and significant step by unanimously voting to hold Ralph de la Torre, CEO of Steward Health Care, in criminal contempt of Congress. This decision comes after de la Torre's refusal to testify about cost-cutting measures implemented at the company's 31 hospitals prior to its bankruptcy filing.
This marks the first instance since 1971 that the Senate has made a criminal contempt referral to the U.S. Department of Justice. The vote followed de la Torre's absence from a September 12, 2024 hearing before the Senate Committee on Health, Education, Labor and Pensions, despite being subpoenaed.
Bernie Sanders, who chairs the committee, emphasized the importance of accountability, stating, "If you defy the congressional subpoena, you will be held accountable no matter who you are or how well connected you may be."
Steward Health Care, founded in 2010 through the acquisition of six Catholic hospitals in Boston, filed for bankruptcy in May 2024, seeking to sell all of its 31 hospitals and address a staggering $9 billion debt. The company's rapid expansion and pioneering of the accountable care organization model led to its position as the largest privately owned hospital network in the U.S.
The Senate committee heard testimony from nurses and public officials who alleged that Steward prioritized corporate profits over patient care. This aligns with the company's history of implementing controversial cost-cutting measures and facing criticism for closing hospitals in underserved areas.
Ed Markey, Democratic Senator from Massachusetts, where several impacted hospitals were based, expressed hope for swift action by the Department of Justice to bring charges against de la Torre.
De la Torre, a cardiac surgeon who became CEO of Caritas Christi Health Care in 2008, argued that testifying would violate his Fifth Amendment rights and frame him as a "criminal scapegoat for the systemic failures in Massachusetts' healthcare system."
The company's financial troubles were exacerbated by the COVID-19 pandemic, despite its focus on technology and data analytics in healthcare. Steward Health Care's collapse has had significant impacts on local healthcare systems in multiple states, affecting over 40,000 employees at its peak.
Federal prosecutors in Boston are reportedly investigating de la Torre and Steward, adding another layer of scrutiny to the company's financial practices and relationships with medical device manufacturers.
As the largest bankruptcy filing in the healthcare industry unfolds, the Senate's action underscores the gravity of the situation and the potential consequences for corporate executives who refuse to cooperate with congressional investigations.
"For everyone who has suffered due to Ralph de la Torre's greed and Steward's collapse, I hope the Department of Justice will move swiftly to bring charges against him."
This unprecedented move by the Senate highlights the ongoing challenges in the U.S. healthcare system and the need for greater oversight of private equity investments in healthcare providers. The outcome of this case may have far-reaching implications for corporate accountability in the healthcare sector.
