THE PILLAGING OF STEWARD HEALTH CARE

The report details how private equity firm Cerberus Capital Management and real estate investment trust Medical Properties Trust (MPT) extracted significant capital from Steward Health Care through sale-leaseback transactions and dividends, contributing to a $9 billion liability and eventual Chapter 11 bankruptcy. It highlights a pattern of asset stripping, including the sale of hospital real estate to fund investor payouts, which left hospitals with unsustainable lease obligations. This financial distress manifested in severe patient care crises, including equipment repossessions, staffing shortages, and the closure of six hospitals, resulting in at least 2,650 layoffs. The document concludes with policy recommendations to increase financial transparency, limit debt-funded dividends, and regulate hospital change-of-ownership transactions.

• Steward Health Care filed for Chapter 11 bankruptcy on May 6, 2024, reporting total liabilities exceeding $9 billion, of which $6.6 billion are long-term lease obligations to Medical Properties Trust (MPT).
• Cerberus Capital Management extracted approximately $800 million during its decade of ownership (2010-2020), including a $484 million dividend funded by a 2016 real estate deal with MPT.
• The partnership with MPT enabled Steward to expand from 11 hospitals in Massachusetts to a 37-hospital system across 10 states by 2017, becoming the largest for-profit private hospital operator in the US.
• Financial mismanagement led to a severe patient care crisis, characterized by the repossession of medical equipment, supply shortages, and critical understaffing. In one instance, a woman died at St. Elizabeth's Medical Center because a necessary embolization coil had been repossessed due to unpaid bills.
• Since 2018, Steward has closed six hospitals in the US, leading to at least 2,650 worker layoffs and reduced community access to care.
• Steward executives and owners siphoned additional funds as the system declined; around the time of Cerberus's exit, a $111 million dividend was paid to owners, and CEO Ralph de la Torre purchased a $40 million yacht.
• The report argues that the collapse was enabled by an ineffective regulatory landscape, noting that Massachusetts regulators approved the 2010 acquisition of Caritas Christi despite community opposition and later released the system from monitoring in 2015 despite worsening finances.
• The document proposes several policy changes to prevent similar failures, including banning debt-funded dividends, limiting sale-leaseback transactions, and requiring audited financial disclosures for hospital operators and their investors.

APA

Private Equity Stakeholder Project (n.d.). THE PILLAGING OF STEWARD HEALTH CARE. https://pestakeholder.org/wp-content/uploads/2024/07/PESP_report_Steward-Bankruptcy_2024.pdf

Chicago

Private Equity Stakeholder Project. THE PILLAGING OF STEWARD HEALTH CARE. n.d. https://pestakeholder.org/wp-content/uploads/2024/07/PESP_report_Steward-Bankruptcy_2024.pdf.

Wikipedia

{{cite report |author=Private Equity Stakeholder Project |title=THE PILLAGING OF STEWARD HEALTH CARE |url=https://pestakeholder.org/wp-content/uploads/2024/07/PESP_report_Steward-Bankruptcy_2024.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{privateequitystakeholderprojectndpillaging, author = {{Private Equity Stakeholder Project}}, title = {{THE PILLAGING OF STEWARD HEALTH CARE}}, institution = {Private Equity Stakeholder Project}, url = {https://pestakeholder.org/wp-content/uploads/2024/07/PESP_report_Steward-Bankruptcy_2024.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }