Monday, June 24, 2024

In wake of Steward crisis, Sen. Warren seeks prison time for corporate ‘looting’ in health care

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“When it comes to health care providers, the harm of private equity is really a matter of life and death,” Warren said during a press conference Tuesday.

With St. Elizabeth’s Medical Center — a Steward Health Care hospital — as a backdrop, Sen. Elizabeth Warren announced a new bill regulating private equity companies in the health care industry. Lane Turner/Boston Globe Staff

Sen. Elizabeth Warren announced new legislation Tuesday that takes aim at private equity in health care, seeking possible prison time for executives whose “corporate greed” results in the death of a patient.

Standing across the street from St. Elizabeth’s Medical Center in Brighton — one of several hospitals at stake in Steward Health Care’s ongoing bankruptcy crisis — Warren said her Corporate Crimes Against Health Care Act will offer penalties and safeguards to protect patients, health care workers, and hospitals from private equity “looting.” 

“When it comes to health care providers, the harm of private equity is literally a matter of life and death,” Warren said.

She cited a case from last October, when a new mother died after giving birth at St. Elizabeth’s and suffering health complications. An embolism coil that doctors could have used to stop bleeding in her liver wasn’t available, because the hospital’s inventory had been repossessed weeks earlier due to an unpaid bill, The Boston Globe reported. 

“And she died a preventable death,” Warren said. Steward did not immediately respond to a request for comment Tuesday.

“I’ll say it bluntly: Turning private equity and corporate greed loose in our health care system kills people,” Warren added. “We need real accountability and we need it now.”

Warren said her bill aims to prevent a repeat of the continued financial turmoil at Steward, which announced commitments for a $225 million loan Tuesday to keep its operations afloat through bankruptcy proceedings.

“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, later clarifying that the legislation does not seek to curb investment in health care. 

According to Warren’s office, the new bill raises the possibility of a criminal penalty of up to six years in prison for health care executives whose corporate “looting” results in a patient’s death. The proposal would also empower state and federal authorities to “claw back” compensation from private equity executives and funnel it back into health care systems.

Warren aimed a dig at Steward CEO Ralph de la Torre as she explained this portion of the bill: “That’s right, Ralph — we will take back your yachts.”

Another facet of the legislation aims to bolster transparency by requiring health care providers that receive federal funding to publicly report mergers, acquisitions, changes in ownership and control, and financial data, Warren’s office said. 

The bill earned support from Massachusetts Nurses Association President Katie Murphy, who noted that the union includes more than 3,000 nurses and health care professionals working in eight of Steward’s nine hospitals in the state. 

“As caregivers on the front lines, our members have been canaries in the coal mine of the dysfunction of private equity and the for-profit health care system for years, sounding the alarm of their mismanagement of these hospitals,” Murphy said Tuesday.

She added: “The corporatization and commodification of health care has left a trail of broken promises made to these communities and the state agencies responsible for the regulation of these providers.”

Murphy also urged state lawmakers to take steps to ensure the embattled hospitals’ survival — a point Warren echoed.

“We need work at the state level; we need work at the federal level,” Warren said. “But what we must do, most of all, is we must make sure that these private equity executives understand they cannot come into our hospitals, suck all the value out of them, lavish the money on themselves, and leave behind an empty shell where people cannot get the services they need and, in fact, lives are lost. That has to come to an end.”

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