Massachusetts Sens. Elizabeth Warren and Ed Markey, both Democrats, introduced legislation Tuesday that would result in prison time for violators of “corporate greed” in health care.
The Corporate Crimes Against Health Care Act would also offer state attorneys general and the U.S. Justice Department more tools to go after health care executives accused of corporate exploitation for endangering patient safety and access to health care, according to a press release.
Warren delivered remarks in front of Steward’s St. Elizabeth’s Medical Center in Brighton, taking issue with the financial management of Steward under CEO Ralph de la Torre. In 2016, Steward sold the land where its eight Massachusetts hospitals are located to Medical Properties Trust, a real estate investment trust. The transaction resulted in the hospitals struggling with massive debt that ultimately forced Steward into bankruptcy.
“My Corporate Crimes Against Health Care Act would prevent what happened with Steward from ever happening again,” Warren said in a statement. “When private equity gets hold of health care systems, it is literally a matter of life and death, so if you drive a hospital like Steward into bankruptcy, putting patients and communities at risk, you should face real consequences.”
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Sen. Warren delivered remarks in front of Steward’s St. Elizabeth’s Medical Center in Brighton. (AP Photo/Jacquelyn Martin, File)
The bill would create a new criminal penalty to put executives in prison for up to six years if they loot health care entities, including nursing homes and hospitals, if the looting leads to a patient’s death.
It would authorize state attorneys general and the U.S. Justice Department to claw back all compensation, including salaries, to private equity and portfolio company executives within a 10-year period before or after an acquired health care firm experiences serious, avoidable financial difficulties due to that looting.
Additionally, the legislation would authorize an associated civil penalty of up to fives times the clawback amount and require health care providers receiving federal funding to publicly report mergers, acquisitions, changes in ownership and control and financial data, including debt and debt-to-earnings ratios.
There would also be a requirement for a Health and Human Services Office of the Inspector General report to be sent to Congress detailing the “harms of corporatization” in health care.
“What Dr. de la Torre, Cerberus Capital Management and Medical Properties Trust did to Steward-owned hospitals in Massachusetts and across the country is unforgivable,” Markey said in a statement. “They promised to improve health care, but instead traded lives and livelihoods for profit. Private equity firms and their enablers will continue to steal from America’s health care system to feed their corporate greed unless we stop them. We need guardrails now to guarantee CEO wealth doesn’t come before the public’s health.”
Sen. Markey said there need to be guardrails to “guarantee CEO wealth doesn’t come before the public’s health.” (Photographer: Eric Lee/Bloomberg via Getty Images)
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Private Equity Stakeholder Project policy director Chris Noble said in a statement that private equity firms have “made a killing out of looting vulnerable hospitals and putting patients and healthcare systems at risk.”
“Grounded in the common-sense idea that U.S. healthcare systems should prioritize safeguarding our long-term health over short-term profits, this legislation is a necessary and timely solution to that problem,” he said.
Massachusetts Nurses Association president Katie Murphy also praised the Corporate Crimes Against Health Care Act.
“As an organization representing frontline nurses and health professionals working in facilities owned and operated by private equity firms and other for profit providers, we have witnessed how the commodification of health care and the strive for profit taking by these firms has undermined the safety of the patients and communities served by those facilities, and as such, we applaud and support Senator Warren’s legislation that will hold these firms accountable for their misdeeds and corporate malfeasance, to claw back those resources taken from our patients and our communities to ensure those resources go to the care of patients and not their exploitation,” Murphy said in a statement.
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