And the value the remainder of us pay—in cash and in blood.
Ralph de la Torre was lately noticed outdoors a horse barn on the International Dressage Pageant in Wellington, Florida. He was sporting cowboy boots, darkish shades, and smoking a cigar, watching his spouse Nicole Acosta compete in an elite horse occasion. However when an investigative reporter from The Boston Globe approached him, he jumped right into a pickup truck and sped away.
De la Torre is a cofounder and the previous CEO of Steward Well being Care, a case examine of how a personal fairness agency can loot a once-vibrant hospital system. De la Torre’s hyper-extraction of wealth from largely financially viable well being amenities has fueled hospital bankruptcies and closures in dozens of communities round america.
As he lounged within the Florida sunshine, de la Torre was in contempt of Congress for ignoring a subpoena. His path of destruction ranges from Orlando, Florida, the place the previously Steward-owned Rockledge Hospital is facing closure after years of disinvestment, to Massachusetts, the place two hospitals have closed and 6 are teetering in chapter. And the place Governor Maura Healy threatened to take Steward hospitals by eminent area.
His notoriety even extends to Malta, the place authorities are investigating scandalous allegations that Steward’s worldwide arm fraudulently took over the island nation’s most important hospital and healthcare system.
The story of Ralph de la Torre is a very sordid instance of an oligarch pillaging billions from the healthcare system. Nevertheless it’s additionally an instance of communities combating again and diligent investigative reporting by the Boston Globe Spotlight team, who have been finalists for this 12 months’s Pulitzer Prize for Public Service.
De la Torre, a once-respected cardiac surgeon, was CEO of Caritas Christi, a nonprofit hospital community of six acute-care amenities in jap Massachusetts. In 2010, dealing with monetary insolvency, de la Torre introduced within the non-public fairness fund Cerberus Capital to acquire the hospital system for $246 million from the Roman Catholic Archdiocese of Boston.
Present Difficulty
To transform a nonprofit hospital to a for-profit entity in Massachusetts required the authorized approval of the state’s legal professional normal, who on the time was Martha Coakley. Coakley authorised the hospital sale in 2010 after determining that “all potential conflicts of curiosity had been sufficiently addressed.” De la Torre lubricated the method with a $5,000 donation to the Massachusetts Democratic Committee in help of Coakley’s run for the US Senate (she finally misplaced to Republican Scott Brown, who helped unleash the Tea Occasion backlash to Obamacare).
Cerberus rebranded its hospital holdings as Steward Well being and de la Torre was CEO. In 2011, it purchased two additional hospitals in Taunton and Quincy, pledging to maintain each open for at the very least 10 years. Three years later—shortly after Coakley misplaced her bid for governor—they closed the Quincy hospital.
Taking a web page from the private-equity wealth-extraction playbook, Cerberus sliced and diced the well being system’s belongings, squeezed operations—and paid itself monumental charges. Steward offered off land and buildings for $1.2 billion to a carefully affiliated actual property funding belief known as Medical Properties Trust (MPT). Loading the corporate with debt and steep rental funds, Steward started to pay lease on actual property the hospitals had beforehand owned.
In 2017, Cerberus additional expanded the Steward community, purchasing additional hospitals to construct the most important for-profit hospital system within the US with 37 hospitals in 10 states. Cerberus offered Steward in 2020, extracting an estimated $800 million for his or her decade of possession. The sale to a doctor’s group was made potential with $335 million in flexible financing from Medical Properties Belief. Shortly after the sale, Steward leaders paid themselves $111 million in dividends.
Inside a 12 months, the monetary home of playing cards started to topple, because the hospitals couldn’t afford the elevated prices of actual property funds, and personal charges. Your entire Steward community of hospitals plunged into chapter 11, with the most important debt owed to MPT, the subsidiary that after owned its properties.
In a single case, medical providers at Steward’s Carney hospital turned so diminished that sufferers and employees referred to it as “Carnage Hospital.” A gaggle of medical residents urged the graduate training accreditation company to close down Carney’s faltering residency program.
Even with Steward on the brink, De la Torre was recklessly utilizing Steward belongings to buy luxurious objects, give private status-enhancing charitable items, and line his personal pockets. Steward’s founder additionally paid himself tens of hundreds of thousands in compensation, purchasing a 190-foot yacht price $40 million and 90-foot $15 million sportfishing boat. He additionally owns a 11,108 square-foot Dallas mansion, valued at $7.2 million, within the unique Preston Hole neighborhood, with neighbors reminiscent of George W. Bush and Mark Cuban.
In 2023, de la Torre made a $100,000 donation to two charities, together with the Dallas Museum of Artwork. This allowed him, his spouse, Nicole, and several other visitors to occupy a Diamond Desk on the museum’s charity gala and rub elbows with different Texas oligarchs, together with Jerry Jones, proprietor of the Dallas Cowboys. De la Torre then reimbursed himself for the donation from Steward Well being Care.
Days earlier than the Dallas gala occasion, a 39-year outdated new mom named Sungida Rashid entered Steward’s hospital in Boston’s Brighton neighborhood with a bleed deep in her liver, requiring she be handled with an embolism coil. However as a result of Steward had stiffed the seller, the coils had been repossessed, that means none have been accessible for Rashid, who died shortly after.
The Boston Globe Highlight group tracked de la Torre’s multiple private-jet trips to Costa Rica, the place he owns three luxurious properties. In addition they documented a number of self-serving charitable donations that de la Torre represented as coming from him personally, however which have been reimbursed by Steward. For instance, after shifting the corporate and himself to Dallas, de la Torre donated $10 million to create a science middle at his child’s non-public college in honor of his mom—with funds from Steward Well being Care. The college then employed a development firm by which de la Torre had a 40 % possession stake—a type of self-dealing with firm cash.
In Might of 2024, Steward Well being declared chapter, a growth that has jeopardized healthcare providers at Carney and 7 different Massachusetts hospitals. A 12 months in the past, Massachusetts state officers proposed to take over the hospitals by eminent area.
Widespread
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Amongst its chapter collectors, Steward owes greater than $7 billion to Medical Property Belief, the entity that owns the actual property and land beneath its hospitals, together with $2 billion to different lenders and contractors they stiffed.
In the meantime, traders like Cerberus have lengthy since exited the scene, taken their charges, and moved on. De la Torre resigned as CEO of Steward in October 2024, however has continued to jet across the globe and attend horse occasions. Upon his return from a Caribbean scuba trip within the fall of 2024, federal agents served him with a search warrant and seized his telephone.
As a part of an investigation into Steward Well being Care, US Senator Ed Markey (D-MA) commissioned a report that reviewed 55 studies of the impression of personal fairness on the healthcare business. The examine discovered that “throughout the result measures, [private equity] possession was most constantly related to will increase in prices to sufferers or payers. Moreover, PE possession was related to blended to dangerous impacts on high quality.” These harms included 32 % greater prices to sufferers and insurers, decrease staff-to-patient ratios, and sufferers’ struggling 25 % extra hospital-acquired problems.
Will de la Torre ever be held accountable for the hurt he has induced? Federal prosecutors are exploring fees in opposition to him for potential embezzlement and fraud in america—and worldwide fees of corruption and bribery beneath the Overseas Corrupt Practices Act. Fortuitously for de la Torre, President Trump, the oligarch in chief, issued an executive order in February freezing new prosecutions and enforcement actions beneath the FCPA.
Personal-equity oligarchs like de la Torre are sucking group well being programs dry, leaving residents with out well being suppliers whereas the federal government struggles to wash up the wreckage. Communities and hospital employees have repeatedly organized protests trying to guard their hospitals and sufferers. However till oligarchs like de la Torre face jail time, they are going to proceed to take the cash and run—or fly off on their jets, or cruise away on their yachts.
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