Steward Health Care Declares Bankruptcy After Private Equity Extracts $1.3 Billion, At Least 15 Patient Deaths Linked to Substandard Care

Steward Health Care, the Dallas-based for-profit hospital system operating 31 hospitals across eight states, declared bankruptcy in one of the most colossal failures of a hospital chain in American history. Private equity firm Cerberus Capital Management and former CEO Ralph de la Torre reportedly extracted approximately $1.3 billion from Steward through a 2016 deal in which hospitals were sold to real estate investors Medical Properties Trust (MPT), which charged inflated lease payments Steward could not afford. When Cerberus exited in 2020, the health system paid a $111 million dividend to owners including de la Torre. Bankruptcy litigation revealed de la Torre’s spending of dividends on a $30 million superyacht, a $6 million ranch near Waxahachie, and a $2.3 million donation to Greenhill School. Years of self-enrichment led to unpaid bills and substandard care contributing to at least 15 patient deaths according to Boston Globe reporting, including a Massachusetts mother who died hours after giving birth when a device that could have stopped liver bleeding had been repossessed weeks earlier. Five hospitals closed since May 2024, resulting in 2,400 layoffs and healthcare access crises across Massachusetts, Florida, and Ohio. After Boston’s Carney Hospital closed in August 2024, emergency transport times increased 20% and nearby emergency departments reported severe crowding. On September 12, 2024, de la Torre refused to appear at a Senate HELP Committee hearing despite a subpoena, resulting in the first contempt of Congress citation by that committee since the Nixon administration. Steward’s bankruptcy trustee filed a $3.4 billion lawsuit in December 2024 alleging de la Torre and three others defrauded the company of $245 million through ‘greed and bad faith misconduct,’ operating Steward to enrich themselves at the expense of creditors, patients, and communities. De la Torre faces a federal probe for potential fraud, embezzlement, and Foreign Corrupt Practices Act violations. The collapse established private equity’s hospital ownership model as fundamentally incompatible with patient care, prioritizing financial extraction over medical necessity.