U.S. Sen. Elizabeth Warren announced legislation Tuesday aimed at warding off future cases of “corporate greed” involving private equity in the health care landscape, like the kind that she says led to for-profit Steward Health Care filing for bankruptcy.
Standing across the street from Steward’s St. Elizabeth’s Medical Center in Brighton, Warren outlined her “Corporate Crimes Against Health Care” bill that would establish new penalties and guardrails for business leaders who endanger patient safety and access to care — including a new criminal penalty that could send executives to prison for up to six years.
That punishment would be for those who “loot health care entities like nursing homes and hospitals, if that looting results in a patient’s death,” according to a bill summary provided by Warren’s office.
“This looting is happening all across the country, from hospitals, to nursing homes, to provider practices, and corporate executives scoop up the cash and avoid any responsibility. I’ll say it bluntly, turning private equity and corporate greed loose in our health care system kills people,” Warren said at a press conference. “We need real accountability, and we need it now. That is why today I am introducing my Corporate Crimes Against Health Care Act to prevent what happened with Steward from ever happening again.”
Warren indicated her bill, if approved, would not apply directly to Steward, which owns eight hospitals in Massachusetts. But the senator said her proposal would apply to private equity situations moving forward.
“It applies to private equity trying to buy any part of the health care system,” Warren said, as she listed examples like hospitals and nursing homes. “It’s not about stopping general investment in hospitals. It’s about saying that when the whole design is to come in and take the hospital over, sell off its assets, use those assets for private gain, and leave behind an empty shell, we have to put an end to that business model.”
The head of an advocacy organization that represents the private equity industry slammed Warren’s proposal.
“America’s health care system faces incredible challenges — no matter how local facilities are funded,” Drew Maloney, CEO of the American Investment Council, said in a statement to the News Service. “Private equity in Massachusetts helps develop cures, supports urgent care facilities, and improves access for patients. Senator Warren’s bill is a purely political attack — not a real solution that will help patients, providers, and hospitals.”
Warren’s bill comes as legislators, patients and health care workers are wrestling with the results of the financial management of Steward under CEO Ralph de la Torre. Steward sold and leased back the property its Massachusetts hospitals sit on in 2016, a transaction that has since put the system in massive debt as executives struggled to keep up with payments to the landlord, Medical Properties Trust, and to vendors.
Warren invoked a troubling Boston Globe report about a mother who died after a complex birth at St. Elizabeth’s, where doctors were not able to treat her internal bleeding with an embolism coil because it had been repossessed due to unpaid bills.
“My bill says that if you drive a hospital like Steward into bankruptcy, putting patients and communities at risk, you should face real consequences,” Warren said.
A Steward spokesperson declined to answer News Service questions about Warren’s bill and the senator’s comments about de la Torre.
Beyond sending corporate leaders to jail, Warren’s proposal would authorize state attorneys general and the Department of Justice to claw back all compensation, including salaries, to executives within a 10-year period, spanning before or after an acquired health care provider “experiences serious, avoidable financial difficulties due to that looting,” according to the senator’s office.
Warren said her bill would block executives from selling the land beneath their hospitals and other health care facilities, prevent real estate investments trusts from influencing operations at health care entities, and repeal tax breaks for real estate investment trust investors that were approved in 2017.
Warren’s bill also directs federal health officials to produce a report on the impact of private equity on the health care system.
Rep. Kevin Honan, whose district includes St. Elizabeth’s, said he visited the hospital Monday for personal health issues, as he pointed to a bandage above his eye. Honan said he also regularly brings his mother to the hospital, which he described as the biggest employer in the neighborhood.
“They’re a real anchor to the neighborhood — so in terms of employment and services, health care –- so it’s critically important that they be preserved,” Honan told reporters after the press conference.
Honan said the quality of care has not worsened at St. Elizabeth’s despite the bankruptcy proceedings, as Steward looks to sell or auction off its hospitals nationwide.
“It’s maintained itself. There’s a lot of pride with the employees here,” Honan said. “I haven’t seen any problem on that front, on quality of care suffering. They’re still committed, devoted.”
Ellen MacInnis, a nurse who’s worked at St. Elizabeth’s for 26 years, said the hospital’s previous owner, Caritas Christi, prioritized taking care of patients.
“Since Steward took over, it has been all about tight staffing, lower quality of supplies, fewer supplies, just-in-time supplies,” MacInnis said, who added it was a “kind of a relief” to see Steward file for bankruptcy. “And now I wish we had a little more certainty about where we’re headed.”
Katie Murphy, president of the Massachusetts Nurses Association, said the union represents more than 3,000 nurses and health care professionals working in Steward facilities.
“But as we applaud this legislation and other legislative efforts being undertaken to hold these operators accountable, we must also take this and every opportunity to remind all who are following this crisis to focus on the single most important priority for the patients and communities of the commonwealth, and that is for all involved to take any and all steps to ensure the survival of this and all the Steward hospitals,” Murphy said, referencing St. Elizabeth’s.
She continued, “We want Steward to be held accountable, but our ultimate accountability is to our patients and the communities served by these hospitals, which is why we and other advocates, along with a growing number of municipal officials, are also calling on our state leaders, including the governor, speaker of the House, Senate president and the attorney general to use state power and state resources to ensure the survival of all these facilities.”
Honan, asked about the future of St. Elizabeth’s, said, “We’re waiting.”
“The commonwealth is seeing who steps forward and might be interested,” Honan said. “In the past, there’s always been concerns about a monopoly of major institutions taking over. Right now, we need help, so we need someone who is committed to the workers, committed to providing health care, to step forward.”
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