CEO paid $250M as his hospitals closed, system filed for bankruptcy

Hospital CEO in the hot seat for taking $250M in payouts as his company entered bankruptcy, closed facilities

What you probably already know: The former CEO of Steward Health Care Systems is in the spotlight after conditions at his hospitals got so bad patients had to be transferred to other locations. Steward owns 33 hospitals in Florida, Arizona, Massachusetts and six other states, and in May filed for bankruptcy. Meanwhile, CEO Dr. Ralph de la Torre was paid $250 million, owns several private jets and has been taking lavish trips. That’s drawn the attention of federal regulators.

Why? A Wall Street Journal report over the weekend looked at the situation since the bankruptcy and found that the state of many of these hospitals is truly dire. Air conditioners failed at a Phoenix hospital, forcing the transfer of patients. At a Florida hospital, pest control workers found 3,000 bats living inside. A Senate committee has since launched an investigation into the management of the hospital system and subpoenaed de la Torre to testify in September.

What it means: Even as hospitals closed across the country, the CEO took a trip to Europe and attended the equestrian events at the Paris Olympics. He has a $40 million yacht and a $15 million sportfishing boat, and owns a $7.2 million mansion in Dallas. Massachusetts Gov. Maura Healey accused de la Torre of stealing millions of dollars out of Steward on the backs of workers and patients to buy himself his fancy toys. The state of Massachusetts has seized control of St. Elizabeth’s Medical Center in Brighton using eminent domain and has been trying to save the other four Steward hospitals in the state. Steward has been losing as much as $365 million a year and its losses have exceeded its $2 billion assets.

What happens now? While de la Torre declined to comment for the story, a spokesperson told the WSJ that he was on a long-planned family trip when the hospitals were closed. In addition to being the CEO, de la Torre is also the majority owner of the hospital system. Before serving as CEO, he was a very successful heart surgeon. He has been looking to sell some of the struggling hospitals but failed to get bids for the ones that have closed. Rural hospitals across the country are struggling under crushing debt and more than 700 are at risk of closure in the next year, leaving thousands of communities without access to health care.

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