No. Private equity does not get to treat our health care system as their own personal piggy bank.

Dear Fellow Vermonter,

You and I know – all too well – that in America today we have a health care system that is broken, dysfunctional and wildly expensive. Too often it’s a system designed not to make patients well, but to make insurance companies, drug companies, and health care executives extraordinarily wealthy.

However, what does not get discussed enough is private equity’s dangerous and growing influence over that system – which is making a bad situation even worse and putting lives and communities at extreme risk. That’s why, as Chairman of the Health, Education, Labor, and Pensions Committee, I led a hearing on the issue.

The Thursday hearing focused on the egregious actions of Steward Health Care, what was once the largest for-profit hospital chain in America, and their CEO, Dr. Ralph de la Torre.  

Working in partnership with a private equity firm, de la Torre became obscenely wealthy by loading up hospitals with billions of dollars in debt and selling the land underneath to real estate executives who charged unsustainably high rent. 

As a result of de la Torre’s elaborate financial scheme Steward Health Care – and the more than 30 hospitals it owns in Massachusetts, Pennsylvania, Arizona, Arkansas, Florida, Louisiana, Ohio, and Texas – declared bankruptcy with some $9 billion in debt. This has left patients, health care workers, and communities in a dangerous and, in many cases, life-threatening situation. 

Over the years, in order to maximize profits, Steward has shutdown emergency rooms, downsized nursing staffs and other health care personnel, skimped on medical equipment and delayed maintenance. While de la Torre and his fellow executives made millions, hospital care deteriorated. The result: Some patients died. Others were placed at unnecessary risk.

And while all this was happening, de la Torre was receiving hundreds of millions of dollars in personal gain. At the hearing, we showed photos of the $40 million yacht and the $15 million luxury fishing boat that he purchased. Steward also purchased a $62 million private jet and, incredibly, a $33 million backup jet — which Dr. de la Torre and his family used for non-business trips around the world.

While the hearing focused on the greed and irresponsibility of Steward Health, we must not lose sight of this fact: The collapse of Steward Health Care is just one extreme example of the damaging role private equity is having on our health care system.

Private equity firms have bought up hundreds of hospitals, thousands of nursing homes, and tens of thousands of medical practices – saddling them up with unsustainable debt and stripping their assets to make huge profits for their executives and investors.

Study after study has shown that, on average, when a private equity firm takes over a hospital, a nursing home, or another medical provider, the price of health care goes up, the quality of health care goes down, and health care workers are asked to do much more work with fewer and fewer staff.

The issue of private equity in health care is an issue that I will continue to work hard to address. We cannot allow wealthy private equity executives to treat our health care system as their own personal piggy bank. 

Health care in America must be a fundamental human right for all, not an opportunity for billionaire speculators to increase their wealth.

Sincerely,