Colin A. Young, Statehouse News Bureau
Leading Senate Democrats want to “keep for-profit, stock-based corporations out of the health care system,” and state policymakers are calling for troubled Steward Healthcare across Massachusetts. It's a bold declaration as the network tries to contain the crisis surrounding the network and its hospitals.
In an interview that aired Sunday, Senate Ways and Means Chairman Michael Rodriguez, R-Westport, told WCVB's “On the Record” that Congress and Gov. Maura Healey said it is imperative to bring about change in the medical community. Access to care for thousands of patients in the Bay State. He said “everything is on the table” as Beacon Hill looks to “survive this immediate crisis” and address the sector more broadly.
“I'm concerned about health care in general because all of our health care providers, all of our hospitals, are facing tremendous pressures. Workforce and employee pressures, not enough nurses. “Inflation costs and health care costs in general are increasing even more. Probably more in the last year than in the last 10 years,” Rodriguez said. “Add to that a sneaky steward crisis to think about how much money Cerberus has.” [Capital Management] The $800 million they made when they sold the hospital was supposed to go back to the health system, but instead ended up in the companies' pockets. ”
He added: “We need to make sure that for-profit, stock-based corporations are removed from our health care system. There should be no room for that in our health care system.”
Steward and its hospital have been owned by private equity firm Cerberus for about a decade. Management of Steward was transferred from Cerberus in 2020 to a group led by Dr. Ralph de la Torre, Steward's founder and CEO. Cerberus said in a statement last week that it was “inaccurate and unfair” that Cerberus executives pocketed $800 million. Connection with Steward transactions.
In response to Sens. Ed Markey and Elizabeth Warren's targeting of private equity, the company said, “These profits primarily benefit millions of teachers, firefighters, law enforcement and local government employees, Our investors, including other pension funds, universities and endowments, benefited.” He spoke about health care during a hearing last week.
The Private Equity Stakeholder Project, a nonprofit organization that tracks private equity investments across the industry and testified at a hearing held last week by Markey and Warren, estimates that about 460 hospitals in the U.S. have invested in private equity. said it is owned by the company. These facilities represent 8 percent of all private hospitals in the United States and 22 percent of all private for-profit hospitals in the country. Additionally, 22.5% of private equity-owned facilities are psychiatric hospitals, the group said.
The group's Private Equity Hospital Tracker listed one Massachusetts hospital owned by a private equity firm as of January. Bournewood Hospital is a psychiatric facility in Brookline owned by Kohlberg & Company. Worcester's Behavioral Medicine Hospital, a fellow psychiatric facility, is also listed as a venture capital-backed facility.
Of the 4,644 hospitals enrolled in Medicare, 49.2 percent were nonprofit, 36.1 percent were for-profit, and 14.7 percent were government-owned, according to data released by the Centers for Medicare and Medicaid Services at the end of 2022. The same report found that non-profit hospitals have an average bed size of 209 beds compared to 107 beds in for-profit hospitals and 175 beds in government hospitals.
The Joint Committee on Health Care Financing held a hearing last month on how growing private equity involvement is impacting the state's health care system. Researchers told the committee that while some private equity deals may have some positive aspects, such as investments to keep local and regional hospitals open, they typically reduce patient costs. It warned that this could lead to an increase in the number of patients, a decline in the quality of medical care, and layoffs. One researcher said bloodstream infections and falls in hospitals could increase when patients are acquired by private equity firms.
Committee chairs said the hearings gave them a better understanding of the challenges at hand, and House and Senate leaders said they wanted to improve private health care in the health care sector by July 31, when the formal legislative period ends. It suggests an interest in addressing equity issues.
When co-host Ed Harding on WCVB asked if the Legislature and the governor could make changes and “fix the problem,” Rodriguez said, “They have to.”
In a roundtable segment on “On the Record,” Republican political analyst Virginia Buckingham (former chief of staff to Gov. Bill Weld and Paul Cellucci) spoke about private equity firms and their medical facilities. He agreed that something should be done about control, but stopped short of endorsing Rodriguez's call to eliminate for-profit and equity-backed companies from Massachusetts' health care industry.
“This is a serious issue. We need regulations for private equity firms that own hospitals or tear down hospitals,” she said. “Whether it's here in Massachusetts law or under federal law, that has to happen.”
