Holy Payday, Batman

A CEO bags $250 million driving his hospital chain into bankruptcy

“America’s health care system is neither healthy, caring, nor a system.” – Walter Cronkite

They used to stick leeches on patients. Now they put them in charge of entire health care systems.

The CEO of Dallas-based Steward Health System drove his hospital chain into bankruptcy, while he and entities he owned collected at least $250 million in payments, according to a rough accounting by The Wall Street Journal. It may have been more.

Dr. Ralph de la Torre, a gifted cardiac surgeon turned private equity hatchet man, bled his 31-hospital chain dry to finance his lifestyle, his critics say.

This included a $40 million yacht, a $15 million sport fishing boat, a $7.2 million Dallas mansion, a $7.2 million, a 500-acre Texas ranch, and a couple of private jets valued at $95 million owned by an entity that de la Torre controls.

Meantime, Steward’s hospital staff were left scrambling to pay bills. Vendors and lenders went without pay, supplies ran short, and patients died from inadequately equipped facilities, according to lawsuits filed against Steward.

This has been going on for a long time thanks to de la Torre and Cerberus Capital Management, the private equity firm he courted for a series of complicated, blood-sucking deals. But sometimes, when all the parasites are fully gorged and their hosts are dying, government officials finally take notice.

(Illustration: AI generated.)

Bats, bedbugs and the repo man

Dreadful tales abound at Steward – shameful incidents that just shouldn’t happen in a developed nation’s health care industry. For instance:

• In Rockledge, Fla. , a Steward hospital was infested with thousands of bats and peppered with guano. A patient reportedly complained he was being attacked by a “giant grasshopper.” He wasn’t bat-shit crazy. It was actually a bat.

• In Phoenix, a Steward hospital lost air conditioning as temperatures topped 100 degrees, forcing patient transfers. Staff said the company had known about the looming issue for years and did nothing about it.

• In Boston, a woman died after giving birth because the equipment needed to save her life had been repossessed by the manufacturer.

• In Lauderdale Lakes, Fla., bed bugs stayed free of charge, and hazardous medical waste piled up in storage rooms, presumably because the bills had not been paid.

A federal grand jury in Boston is reportedly investigating the hospital chain. And the Senate Committee on Health, Education, Labor and Pensions, has subpoenaed de la Torre to a hearing on Sept. 12.

We’ll see what he has to say under oath. He has been mostly quiet.

Last month, for instance, as Steward announced plans to close two of its failing Massachusetts hospitals, de la Torre was unavailable for comment. He was in France attending Paris Olympics equestrian events at the Palace of Versailles.

A three-headed dog from hell

By all accounts, de la Torre was a gifted cardiac surgeon. He took the hippocratic oath, then turned to Cerberus Capital Management, named after the three-headed hound that guards the gates of Hades in Greek mythology.

The story begins with Caritas Christi Health Care, a small non-profit hospital chain that was run by the Archdiocese of Boston. It struggled financially and in 2006, its CEO resigned amid allegations that he was hugging and kissing female employees. (I know. The CEO of a Catholic hospital system accused of unwanted touching? Go figure.)

The non-profit chain named de la Torre CEO in 2008, and in 2009 de la Torre led its sale to Cerberus.

In 2010, Charitas Christi became a for-profit chain called Steward (as if Cerberus and crew were stewards looking to take care of the place). The new for-profit company kept de la Torre as CEO and went on a wild acquisition spree, becoming one of the nation’s largest hospital chains.

It financed its deals by selling its hospitals to a company called the Medical Properties Trust, and then leasing them back. The deals brought in quick cash, but now Steward can no longer afford the rents it owes MPT, leading to its May 6 bankruptcy filing.

Cerberus, however, is long gone. It pulled out of Steward in 2020 after making more than $800 million from its investment over 10 years. It handed the company to a group of physicians led by de la Torre in exchange for a $350 million convertible bond.

Then in 2021, even as Steward was struggling financially through the Covid pandemic, the company distributed $111 million to its shareholders – mostly to de la Torre who owned about 73% of the company.

“He basically stole millions out of Steward on the backs of workers and patients and bought himself fancy yachts, mansions and now apparently lavish trips to Versailles,” Massachussetts Gov. Maura Healy said in a recent statement. “I hope he gets his just due and that federal investigators will come after him for his actions.”

Capitalizing on the vulnerable

Yes, but profiteering off the sick and dying is the American way.

Few would complain about de la Torre were it not for Steward’s bankruptcy filing and the messy trail of blood it is leaving in its wake, from shuttered hospitals to neglected patients.

We accept grandiose CEO pay as a tenant of capitalism, and no one bats an eye until something blows.

To cite one example, CEOs of the top 10 for-profit health care companies made between $14 million and $21.5 million in 2023. Andrew Witty, sitting atop UnitedHealth Group, was No. 1 on the list with a 12.8% increase in compensation.

Not even inflation runs that high.

And when will our health care costs stop skyrocketing? Maybe never.

America’s health care prices are out of control because America’s health care systems are infected with parasites.

Don’t miss these Blunders

• Drunks Wanted This Week in Blunders – Jan. 19-25

• Blowing A Fartcoin Are meme coins heralding the next market crash?

• Billionaires Are Destroying Everything, And They Know It The World Economic Forum's 2025 Global Risks Report is a roadmap for the devastation to come

• Chicken Soup For The Soulless This Week In Blunders – Jan. 12-18

• Can Musk Single-Handedly Capture A Regulator? A relatively petty case against the multibillionaire may signal who is really running the country

• You Can Plunder, Too Private Equity firms want average Americans to join in the looting

• Florida Man Goes To The Movies This Week In Blunders – Jan. 5-11

• Bigots Fly Free United Airlines may be under fire for its diversity efforts, but it just settled a nasty racial discrimination case

• Lock ‘Em Up Welcome to the Business Blunders Hall of Shame commemorating top business leaders convicted of felonies

• Tip Your Banker? This Week in Blunders – Dec. 29 - Jan. 4

• Business Blunders Hall Of Shame From magnate to inmate: These are the nation's most notable white-collar convicts

• Unshackling Ponzi Perps It’s a bad idea to let convicted swindlers go free. Biden just gave clemency to a slew of them

• Married To Madoff Victims of a fraud that regulators missed decades ago are finally getting most of their money back

• MAGA Mad About Musk This Week in Blunders – Dec. 22-28

• Biggest Business Blunders of 2024 It was an ignominious year for economic forecasters, CrowdStrike, Boeing, FTX, Mattel, Truth Social, Red Lobster, Fisker, Spirit Airlines, TicketMaster and the dumbest bank embezzler in history

• Go To Zelle This Week in Blunders – Dec. 15-21

• Basketball Jones Former Harlem Globetrotter and NC State point guard gets seven years for a Covid-19 loan scam

• A CEO’s Road To Hell It began with forbidden love and ended in felony charges for Comtech’s Ken Peterman

• Sorry About That Opiod Thing This Week In Blunders – Dec. 8-14

• Spoiled, Rotten Day Trader Ian G. Bell touted a wealthy background to allegedly dupe investors in his money-losing investment scheme

• Shot In The Back Did maddening back pain drive Luigi Mangione to murder UnitedHealthcare CEO Brian Thompson?

• The Killionaire Here's why the man who gunned down UnitedHealthcare's CEO became an instant folk hero

• Enron Was A Parody Of Itself Here's where CEO Ken Lay ate before he died

• Big Blunders Come In Small Packages Macys blames an employee for hiding 'small package delivery' expenses. Anyone remember the boxes at Miniscribe?

• Billion-Dollar Reprobate Bill Hwang lost billions investing 'according to the Will of God.' Now he's going to prison for cheating Wall Street banks

• Hitting The 'Undo' Button At FTX Gary Wang wrote the code that enabled an $8 billion fraud. Prosecutors and a federal judge sang his praises

• Ponzi Once, Ponzi Twice A New Jersey man got probation for running a $300 million scam. Then he launched a $658 million fraud with ads on Fox News

• Hello? What About The $36 Trillion Tab? America's balance sheet is about to get worse and Republicans don't care

• A Mouse That Roared A small-time CEO launched a proxy war with $17.32 in his company's brokerage account. Now he's going to prison.

• Bozo Bezos The Washington Post's billionaire owner makes a clownish excuse for killing a presidential endorsement

• CEOs Gone Wild Abercrombie & Fitch had to know its CEO was a freak

• X Marks the Spot An Alabama man hacks the Securities and Exchange Commission with an iPhone, then returns it for a refund

• Danger, Will Robinson Destiny Robotics promised AI-powered humanoids that could form meaningful relationships, but it delivered a wig stand

• All the Kosher Meals You Can Eat Lufthansa gets sacked with a record fine for banning Jews from a flight

• Magic Mushroom ‘Pump and Dump’ Here's what can happen when 'shroom heads take control of a penny stock

• InHumana Bad reviews matter, and this health care insurer is paying a hefty price for ignoring them

• And the Winner is … Walmart The nation's largest grocer must be loving government efforts to break up the $25 billion Kroger-Albertsons deal

• The Incredible Shrinking Billionaire The chips are down for EchoStar's poker-playing Charlie Ergen

• Plastic Balls ExxonMobil put polymers in our testicles

• Bankster Bonus A top Old National Bank executive bags $2.6 Million after his arrest for allegedly molesting a child

• Watery Grave CEOs usually don't implode as literally as OceanGate's Stockton Rush

• Drivin’ that Train It's the end of the line for the embattled Norfolk Southern CEO

• Stinky Stonk Anatomy of a nightmare investment that's poised to get worse

• The Music Man Michael Smith allegedly played his AI-generated music billions of times to bots, ripping off streaming services and artists

• One Sorry Ferrari Online gaming CEO hustles car broker and scams investors with an IPO that never happened

• Adam Family Brothers allegedly raised $60 million with a phony crypto bot and spent investors' money on new homes and luxury goodsPiggy Banker A Bank CEO robs his own bank while crypto scammers rob him

• Clowns In Court An FTX felon wants to take back his guilty plea after prosecutors charged his girlfriend with campaign finance violations

• Piggy Banker A Bank CEO robs his own bank while crypto scammers rob him

• The Wonders of Blunders Why I follow business failures, and why you should, too.

• Holy Payday Batman A CEO bags $250 million driving his hospital chain into bankruptcy

• Design Your Life An alleged Ponzi schemer bagged $1 million a day with happy talk

• Nike Air Athletic-apparel giant's top executives preach climate change as they rev up their corporate jets

• If you can't woo 'em, sue 'em Elon Musk ran off advertisers; now he's suing them for leaving

• Drunken Chicken Tyson Foods' suspended chief financial officer could make a comeback

• In Real Life A "serial founder" finds a serial sucker in SoftBank

• Smoke on the Water Luxury Miami condo association sues to evict chain-smoking fraudster

• Beyond Stupid TV stock tips are for chumps

• Canary in a CrowdStrike Cybersecurity giant's blunder is a warning for the whole world

• Boeing’s Lost Spirit Outsourcing proves bad for business

• Lizards of Ozy The chameleons at failed Ozy Media are turning orange

• A Harvard Business Blunder Graduates duped in a ridiculous Ponzi scheme

• Con Air Fly the felonious skies with Boeing

• Smell the Glove Milwaukee Tool reeks of forced Chinese labor, lawsuit alleges

• Fisker the Frisker An electric car entrepreneur offers a valuable business lesson: If at first you don't succeed, file, file again

• Musk Mouth It takes a genius a long time to address an obvious blunder

• Sorry Seems To Be the Hardest Word A simple apology proved difficult for crypto tycoon Do Kwon after the $45 billion collapse of his Terraform Labs

• Epoch Crimes The finance chief of a far-right publication allegedly went far wrong

• Ticketbastard Live Nation deserves every ounce of contempt it has provoked

• How to Boil a Lobster Endless shrimp didn't drive this soggy seafood chain into bankruptcy

• Take Out Your Trash The Federal Deposit Insurance Corp. insures bank deposits, bullies, racists and sexual predators

• Sam in the Slam FTX founder Sam Bankman-Fried invests in beans and rice

• Billionaire Prison Time Here's how a hedge fund honcho managed incarceration

• ‘Bitcoin Jesus’ Saves Crypto promoter charged with dodging $48 million in taxes

• The Power of Red Failed Republic First Bancorp learns that 'fans' are fickle

• Our Deadhead Fed Head Jerome Powell has flubbed inflation

• Google This Billionaire A Silicon Valley legend makes his dumbest trade ever

• Don’t Listen to Sam Boeing engineer warns of 'catastrophic accidents and passenger fatalities'

• Calling Spirit Airlines on the Ouija Board Will customers miss this carrier if it dies?

• Musk’s F-Ing Message The genius of our age is scaring Tesla's customers

• A CEO Who Made His Bed Mattress Firm's latest buyer may be short on memory foam

• They Bought Crypto From a Klepto FTX founder Sam Bankman-Fried's trail of tears spills into court

• What’s in Your Wallet? Abusing company credit cards is a common employee grift

• My Latest Blunder Lessons from an epic failure at The Messenger