BOSTON (AP) — A Senate committee voted Thursday to authorize an investigation into the bankruptcy of Steward Health Care and subpoena the company’s CEO, Dr. Ralph de la Torre.
The subpoena would require de la Torre to testify at a hearing on September 12 before the Senate Committee on Health, Education, Labor and Pensions.
De la Torre had declined an invitation to testify on June 25 from committee chairman Senator Bernie Sanders, the independent senator from Vermont, and Bill Cassidy of Louisiana, the committee’s ranking Republican. De la Torre also declined invitations to testify at a hearing in Boston chaired by Democratic Senator Edward Markey of Massachusetts.
In May, Steward announced that the company planned to sell all of its hospitals after announcing that it had filed for bankruptcy.
Sanders said the Steward firm’s bankruptcy shows how unsafe it is to allow private equity managers to make huge sums of money by taking over hospitals, burdening them with debt and selling off their assets.
“Perhaps more than anyone else in America – and that is undoubtedly a dubious distinction – Ralph de la Torre, CEO of Steward Health Care, embodies the kind of outrageous corporate greed that permeates our entire for-profit health care system,” Sanders said.
Sanders said de la Torre became “obscenely rich” by burdening hospitals from Massachusetts to Arizona with billions of dollars in debt and selling the land on which the hospitals were located to real estate managers who charged unsustainably high rents.
As a result, Sanders said, Steward and the 30 hospitals the company operates in eight states were forced to file for bankruptcy with $9 billion in debt.
Steward Health Care said in a statement that the company would process the subpoena.
“We understand the desire for greater transparency about our path and our path forward,” the company said. “The bankruptcy process is public and the records to date, including briefings, court dates, mediations and related proceedings, reflect active monitoring and participation by various government regulators, government entities, secured and unsecured creditors.”
The company said that one of the agencies involved in overseeing Steward’s bankruptcy proceedings was the Office of the United States Trustee, a division of the U.S. Department of Justice.
The company is also under observation in Malta.
Steward’s problems in Massachusetts have drawn the ire of political figures, including Democratic Governor Maura Healey.
On Tuesday, Healey said the state was reviewing bids for Steward’s hospitals in Massachusetts.
Markey said owning a hospital brings additional responsibilities.
“This is not the acquisition of a widget company. This is not the acquisition of a coffee company. Here they are taking over hospitals and applying the exact same standards they would apply to a widget company,” Markey said.
The Dallas-based company has said it does not expect any disruptions to the day-to-day operations of its hospitals during the bankruptcy proceedings. The company said operations will continue as usual throughout the duration of the Chapter 11 proceedings.
In court filings, the company said Steward began a “phased marketing process” to sell its hospital facilities in slow January.
Steward’s eight Massachusetts hospitals include St. Elizabeth’s Hospital and Carney Hospital, both in Boston. The company has filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas.
Following the bankruptcy filing, de la Torre stated in a press release: “Steward Health Care has done everything in its power to operate successfully in an extremely challenging healthcare environment.”
A group of Democratic congressmen led by Markey demanded assurances that health and retirement benefits for Steward Hospital employees would be secured.
