Senate panel votes to subpoena Steward Health CEO about hospitals' bankruptcy

Members of the Senate Health, Education, Labor and Pensions Committee voted 16-4 Thursday to issue a subpoena to Dr. Ralph de la Torre, the chief executive officer of Steward Health Care, a hospital company that filed for Chapter 11 bankruptcy protection in May.

The subpoena was the first subpoena to compel testimony that the committee has ever issued.

Committee members also voted 20-1 to authorize an investigation of the Dallas-based company during a public session that was streamed live on the web.

Related: Steward Health Care files for Chapter 11 bankruptcy protection

Cerberus Capital Management began forming Steward through acquisitions in 2010 and made the company the largest private, for-profit hospital operator in the United States.

In 2016, it sold its hospitals to another company and began to lease them back.

Today, it describes itself as a physician-led company with 33 community hospitals in nine states, 107 skilled nursing facilities, about 7,900 beds under management and 30,000 employees.

De La Torre has blamed the upheaval related to the COVID-19 pandemic, rising health care labor costs. low government plan reimbursement rates and delays in the completion of asset sales.

Sen. Elizabeth Warren, D-Mass., has portrayed the bankruptcy as an example of the dangers of letting private equity firms invest in hospitals and use risky strategies such as property sales and leasebacks.

Sen. Bernie Sanders, a Vermont independent who has allied himself with the Democrats and serves as the Senate HELP chair, called the Stewart Health bankruptcy both of the danger of letting private equity firms invest in hospitals and the problems with the U.S. health care system.

“It’s dysfunctional,” Sanders said. “It is wildly expensive, and, in many cases, it is extremely cruel,” Sanders said. “It is a system that is designed not to make patients well but to make insurance companies and drug companies and other people who make money off of the system extremely wealthy.”

Sen. Bill Cassidy, R-La., a medical doctor, said Senate committee subpoenas should be used only when absolutely necessary and other efforts to get information have failed.

“The subpoena we are voting on today meets that criteria,”

Cerberus helped the hospitals flourish at first, but later it let Steward grow at an unsustainable rate, Cassidy said.

The private equity system did not cause the problems at Steward, and Cerberus money kept the company afloat, Cassidy said.

“Blaming private equity for Steward’s mismanagement is not productive,” Cassidy said.

But “the situation is actively impacting patients in the communities we represent,” and investigators need to find out what went wrong, he said.