Private Equity-Backed Hospital Faces Scrutiny after Mother’s Death Due to Compromised Care

Sungida Rashid’s husband, Nabil Haque, described the moment his wife held their daughter in her arms after giving birth at Boston’s St. Elizabeth’s Medical Center in October. Steward Health Care has bought hundreds of US hospitals in the previous 15 years, including Rashid’s birthplace. Steward began buying Massachusetts hospitals in 2010 with hundreds of millions of dollars from Cerberus and today controls 33 in 8 states.

A year-and-a-half CBS News investigation revealed how private equity investors stole hundreds of millions of dollars from community hospitals, causing public health problems. Last April, CBS News uncovered Steward sold Texas Vista Medical Center’s real estate to divert funds from hospital operations before closing it. A Steward representative told CBS News executives “deny that any other considerations were placed ahead of that guiding principle.”

Unpaid payments at Steward hospitals across have threatened life-saving supplies. Uterine hemorrhage and back-of-rib cage discomfort occurred at St. Elizabeth’s in October. She had an emergency CT scan and was transported to the emergency hospital, where doctors noticed liver hemorrhage. The Boston Globe reported Rashid’s death during surgery at a second facility hours later.

CBS News said that St. Elizabeth’s health care personnel complained to Massachusetts’ health department that the manufacturer had come to “retrieve any coils at the hospital” weeks earlier because Steward hadn’t paid its costs. A complaint filed by the company last October claimed Steward owed $2.5 million in unpaid payments.

Steward declined to discuss Rashid’s death due to privacy considerations. The incident sparked recriminations in Massachusetts, where Steward controls nine hospitals, including St. Elizabeth’s. Massachusetts Gov. Maura Healey called her death “outrageous,” and her office is investigating if it was avoidable.

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Steward Healthcare Faces Financial Strain

Sungida Rashid’s husband, Nabil Haque, described the moment his wife held their daughter in her arms after giving birth at Boston’s St. Elizabeth’s Medical Center in October.

The epidemic and poor Medicare and Medicaid reimbursement rates have hurt Massachusetts-based Steward, a healthcare firm. When Steward bought its Massachusetts hospitals, the employee pension fund was underfunded by hundreds of millions of dollars. The business has spent $2 billion on them or more. 

The corporation attributes its financial troubles to the epidemic and poor reimbursement rates. In an interview with CBS News, CEO Elizabeth Healey accused Steward executives of putting the firm in debt and enriching themselves at the public’s cost.

After generating $800 million in a decade, private equity company Cerberus sold their Steward share by January 2021. Since 2016, Steward has sold more than $1 billion of its hospitals’ land and buildings to Medical Properties Trust, which buys hospital real estate from private equity investors. 

Another private equity-backed chain, Prospect Medical, liquidated the real estate of a collection of suburban Pennsylvania hospitals to satisfy the debt they generated when they paid themselves hundreds of millions of dollars from the company’s coffers.

Pennsylvania’s health agency closed the century-old Delaware County Memorial Hospital due to staffing issues. Before closing, Delaware County Memorial was demolished piece by piece, causing lengthier emergency room waits and pushing staff to transfer more patients to other hospitals, according to 41-year employee Angela Neopolitano. Steward’s owners paid themselves millions in dividends, according to a 2021 SEC filing.

Ralph de la Torre, Steward CEO, also bought a $40 million 190-foot yacht. Health care personnel on Steward’s hospital frontlines are particularly distressed by such reports.

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