Massachusetts Senators Elizabeth Warren and Ed Markey, both Democrats, introduced legislation on Tuesday that would impose prison time for violators of “corporate greed” in health care.
The Corporate Crimes Against Health Care Act would give state attorneys general and the U.S. Department of Justice more tools to pursue health care actors suspected of corporate exploitation that endangers patient safety and access to care, the report said. press release.
Warren spoke outside Steward’s St. Elizabeth Medical Center in Brighton, where she challenged Steward’s financial management under CEO Ralph de la Torre. In 2016, Steward sold the land on which its eight Massachusetts hospitals sit to real estate investment trust Medical Properties Trust, a deal that left the hospitals saddled with huge debts and ultimately forced Steward into bankruptcy.
“My corporate health care crime bill will ensure that what happened at Steward can never happen again,” Warren said in a statement. “When private investment companies take control of our health care system, it is literally a matter of life and death, so they should face real consequences if they drive hospitals like Steward into bankruptcy and put patients and communities at risk.”
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Senator Warren spoke outside Steward St. Elizabeth Medical Center in Brighton. (AP Photo/Jacqueline Martin, File)
The bill creates new criminal penalties that would subject executives to up to six years in prison for robbing health care facilities, including nursing homes and hospitals, if the robberies result in the deaths of patients.
The bill would authorize state attorneys general and the U.S. Department of Justice to recover all compensation, including salary, from private equity and portfolio company executives within 10 years before or after an acquired health care company experiences severe and avoidable financial distress due to predation.
Additionally, the bill would authorize the imposition of civil penalties of up to five times the amount of the clawback and require health care providers that receive federal funding to disclose financial data, including mergers, acquisitions, changes of ownership and control, debt and debt-to-income ratios.
It would also require the Department of Health and Human Services’ Office of Inspector General to submit a report 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 nation is unacceptable,” Markey said in a statement. “They promised to improve health care but instead traded people’s lives and livelihoods for profit. Unless we stop them, private equity firms and their backers will continue to steal from America’s health care system to satisfy their corporate greed. We need guardrails now to ensure that CEO wealth does not take precedence over the health of our citizens.”
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Senator Markey said guardrails are needed to “ensure that CEO wealth is not prioritized over the public’s health.” (Photographer: Eric Li/Bloomberg via Getty Images)
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Chris Noble, policy director at the Private Equity Stakeholder Project, said in a statement that private equity firms are “making big money by predating vulnerable hospitals and putting patients and the health care system at risk.”
“Our health care system is based on the commonsense idea that protecting long-term health should come before short-term profits, and this bill is a necessary and timely solution to this 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 medical professionals working in facilities owned and operated by private equity firms and other for-profit companies, we have seen how the commercialization of health care and the profit-seeking of these companies has undermined the safety of the patients and communities they serve. That’s why we applaud and support Senator Warren’s bill, which will hold these companies accountable for their misconduct and corporate torts, take back resources taken from patients and communities, and ensure those resources are used to treat patients rather than exploit them,” Murphy said in a statement.
