Asleep at the switch?
The headlines in recent days have been full of revelations about the financial and clinical nightmares surrounding Dallas-based Steward Health Care and its legal and regulatory nightmares.
But a quick Google search reveals this isn’t a sudden problem, but rather a chronic condition surrounding the for-profit hospital chain founded in Massachusetts out of the Caritas Christi system in 2010 with the backing of Cerberus Capital Management, the private equity firm that takes its name from the three-headed dog that guards the gates of Hades.
All of which begs the question — where were the regulators? And the media?
The American Prospect offers the most detailed review of the system headed by former cardiac surgeon Ralph de la Torre. It examines the financial wheeling and dealing that included literally selling the land out from under the Steward hospitals and assorted transactions that enabled de la Torre to purchase a $40 million yacht while closing a hospital in Quincy, and seeking permission to shutter another one in Stoughton.
And that’s just in Massachusetts.
Steward has been locked in a lawsuit with the Massachusetts Health Policy Commission and the Center for Health Information and Analysis for refusing to disclose certain financial information.
HPC Executive Director David Seltz is blunt in his assessment of the company’s opacity:
“To me, the obstinate refusal by Steward corporate leadership to hand over these legally mandated reports is a grave disservice to the public, to the patients that are served by that system and to the workers of that system."
But the HPC has no real power to enforce its role, which is to oversee health care costs under the state’s 2012 cost containment law.
Which raises the question, who does? Not-for-profit hospitals must answer to the attorney general’s Non-Profit Organizations/Public Charities Division. But who oversees corporations? It appears that task may actually fall to the Corporations Division of Secretary of State Bill Galvin’s office.
De la Torre’s business tactics were clearly known. Yet they seemed to fall off regulators’ radar screens after the company picked up and moved to Dallas. Despite the fact they refused to cooperate with state disclosure laws — and failed to deliver on promises surrounding clinical care and medical education.
Governor Maura Healey, who was attorney general during much of Steward’s Massachusetts history, has vowed the state will not bail out the for-profit company. Suggestions have been raised that Steward will sell four of its hospitals.
But who will buy them? There’s been rumors it could be Mass General Brigham, already the region’s largest system. And one under regulators’ eyes for its high costs.
The pandemic and its aftermath has imposed severe stress on the state’s hospital system. Steward’s Norwood Hospital has been closed since 2020 after a flood. Brockton Hospital, which competes with Steward’s Good Samaritan Hospital, has been closed for a year after a fire.
Emergency departments are so overcrowded patients can wait hours or days for beds, especially for behavioral health issues.
Steward leaders may think they have state officials over a barrel. Hopefully, they aren’t right.