April 19, 2024

Warren, Markey Question Steward’s Private Creditors, Push for Lenders to Help Keep the Hospitals Afloat

Text of Letters (PDF)

Boston, MA – As Steward hospitals in Massachusetts remain in danger of closure due to high debts rung up by CEO Ralph de la Torre and other top executives, and the hospitals’ previous private equity owners,  United States Senators Elizabeth Warren (D-Mass.) and Edward J. Markey (D-Mass.) sent a letter to six  private credit funds that are holders of Steward’s debt, asking them a series of questions about their loans and calling on them to offer loan modifications that could potentially help keep the hospitals afloat.

In the summer of 2023, a group of six private credit funds provided Steward with an approximately $600 million loan,and then, in early 2024, offered a second round of emergency bridge loan financing. These lenders have threatened to call the loan, potentially forcing Steward into further fiscal turmoil. The senators’ letter describes how these lenders have the ability and the responsibility to help keep the Steward hospitals open. 

“Steward’s financial ruin would be devastating for the people of Massachusetts, and it would be deeply troubling if private lenders were to continue squeezing Steward rather than assist in potential solutions to keep the hospitals open,” wrote the senators

Steward’s Massachusetts hospitals are a critical part of the state’s health care system. Steward is the third-largest hospital operator in the Commonwealth, employing nearly 16,000 individuals and serving tens of thousands of patients each year. And Steward’s Massachusetts hospitals serve largely underserved communities, with a large proportion of patients enrolled in Medicare and Medicaid.

“As one of the largest holders of Steward’s debt, you have the power to help keep those hospitals open and preserve access to care for communities in Massachusetts,” the senators concluded. “Your company has an important opportunity to help Steward’s Massachusetts hospitals overcome this crisis by offering loan modifications that would make it financially feasible for new operators to take over.”

Senator Warren has been leading oversight on Steward and has repeatedly called out the impact of private equity and consolidation on health care costs and quality of care: 

  • On April 16, Senators Warren and Markey called out Medical Properties Trust and Macquarie Infrastructure Partners for exploiting Steward Hospitals, and urged them to help keep the hospitals open.

  • On April 8, 2024, Senators Warren, Markey, and the rest of the MA delegation urged the FTC and DOJ to closely scrutinize the sale of Steward Physician Group to Optum.

  • On April 3, 2024, Senator Warren delivered remarks at a Senate hearing in Boston titled, “When Health Care Becomes Wealth Care: How Corporate Greed Puts Patient Care and Health Workers at Risk,” which centered on Steward Health Care’s Massachusetts hospitals.

  • On March 26, 2024, Senator Warren released a statement about Steward’s plan to sell its physician group Stewardship Health to UnitedHealth Group’s subsidiary Optum.

  • On March 26, 2024, Senators Warren and Markey sent a letter to Steward CEO and Chairman Dr. Ralph de la Torre, calling on him to testify at a congressional hearing in Boston.

  • On March 8, 2024, Senators Warren and Markey sent a letter to Dr. de la Torre, blasting him for years of financial mismanagement, private equity schemes, and executive profiteering that have led to Steward Health Care’s financial crisis, which threatens to upend access to health care in Eastern Massachusetts communities and yank jobs from the health care workers employed at the company’s facilities.

  • On February 15, 2024, Senators Warren and Markey, along with all nine members of the Massachusetts congressional delegation, sent a letter to Cerberus seeking answers from the private equity firm for its role in creating the current financial challenges at Steward hospitals.

  • On January 29, 2024, Senator Warren released a statement about Steward’s financial situation and allegations of patient neglect at Steward facilities.

  • On January 23, 2024, Senator Warren led the Massachusetts congressional delegation in a letter to the CEO of Steward Health Care pressing the company to brief them on Steward’s financial position, the status of their Massachusetts facilities, and their plans to ensure the communities they serve are not abandoned.