Steward Health Care, a prominent Dallas-based hospital chain, is currently embroiled in significant financial and legal turmoil. The company, which operates numerous hospitals across the United States, is facing a federal investigation for potential fraud and corruption.

Bankruptcy Filing

In May 2024, Steward Health Care filed for Chapter 11 bankruptcy protection, citing an overwhelming debt burden amounting to billions of dollars. The chain includes 31 hospitals nationwide, with a notable presence in Massachusetts, where it owns seven hospitals.

Federal Investigation

The U.S. Department of Justice has initiated a criminal investigation into Steward Health Care, scrutinizing possible violations of the Foreign Corrupt Practices Act (FCPA). This law prohibits U.S. entities from engaging in bribery and corrupt practices overseas. The investigation extends to allegations of fraud and corruption involving Steward’s operations in Malta, where the company manages certain state-run hospitals.

Executive Compensation Amid Financial Struggles

Despite its financial woes, Steward Health Care’s executives received substantial compensation. CEO Ralph de la Torre earned $5.6 million, with $4.2 million as salary and additional reimbursements. Other executives also received hefty payouts, some exceeding $2 million each.

Private Surveillance and Further Findings

An investigation by the Boston Globe revealed that Steward Health Care had employed a private intelligence firm to monitor and gather information on its critics, costing the company $1.6 million shortly before its bankruptcy filing.

Impact on Healthcare Services

The bankruptcy and ongoing federal investigation have raised serious concerns about Steward Health Care’s financial stability and its capability to deliver quality patient care. These issues have also prompted calls for enhanced transparency and accountability within the healthcare industry.

Timeline of Key Events

May 2024: Steward Health Care files for Chapter 11 bankruptcy protection.
June 2024: Reports emerge about the company’s use of private intelligence services.
July 2024: The U.S. Department of Justice launches a criminal investigation into the company.
July 2024: Deadline for bids on Steward’s Massachusetts facilities, with a delayed bankruptcy auction.

Public and Official Reactions

Senator Edward J. Markey (D-MA) criticized Steward Health Care, labeling it a prime example of corporate greed jeopardizing the healthcare system. In response, the Massachusetts Department of Health has commenced its investigation into Steward’s operations within the state. The company has refrained from commenting on the federal investigation, emphasizing its cooperation with the authorities.

Further Developments

The federal investigation is part of a broader scrutiny involving Steward Health Care’s international dealings. In Malta, the company faces a criminal investigation, with local authorities recommending charges against executives Ralph de la Torre and Armin Ernst for money laundering, criminal association, and corruption of public officials.

Patient Care Concerns

The financial and legal challenges confronting Steward Health Care have potential repercussions for its patients. Earlier this year, North Shore Medical Center, one of its hospitals, shut down several critical units to mitigate financial losses. Additionally, the U.S. Food and Drug Administration (FDA) ordered the hospital to halt mammograms and inform patients about potentially inaccurate results.

Steward Health Care’s ongoing saga underscores the profound impact of corporate governance and legal compliance on the healthcare sector, with far-reaching implications for patient care and industry practices.

List of Steward Health Care Hospitals

Steward Health Care is the largest private, for-profit health system in the U.S., operating 31 hospitals in eight states. Here are the hospitals according to the health system’s website:

Arizona: 4

Florence Hospital
Mountain Vista Medical Center (Mesa)
St. Luke’s Behavioral Health Center (Phoenix)
Tempe St. Luke’s Hospital
Arkansas: 1

Wadley Regional Medical Center at Hope
Florida: 8

Coral Gables Hospital
Florida Medical Center (Lauderdale Lakes)
Hialeah Hospital
Melbourne Regional Medical Center
North Shore Medical Center (Miami)
Palmetto General Hospital (Hialeah)
Rockledge Regional Medical Center
Sebastian River Medical Center
Louisiana: 1

Glenwood Regional Medical Center (West Monroe)
Massachusetts: 9

Carney Hospital (Dorchester)
Good Samaritan Medical Center (Brockton)
Holy Family Hospital – Haverhill
Holy Family Hospital – Methuen
Morton Hospital (Taunton)
Nashoba Valley Medical Center (Ayer)
Norwood Hospital
Saint Anne’s Hospital (Fall River)
St. Elizabeth’s Medical Center (Brighton)
Ohio: 2

Hillside Rehabilitation Hospital (Warren)
Trumbull Regional Medical Center (Warren)
Pennsylvania: 1

Sharon Regional
Texas: 5

Medical Center SE Texas – Port Arthur
Odessa Regional Medical Center
Scenic Mountain Medical Center (Big Spring)
St. Joseph Medical Center (Houston)
Wadley Regional Medical Center (Texarkana)
Steward Health Care’s extensive network reflects its significant role in the healthcare industry, highlighting the critical nature of the ongoing investigations and their potential impact on patients and healthcare services nationwide.