Steward Health Care CEO Ralph de la Torre resigns
Steward Health Care CEO Ralph de la Torre resigns
    Posted on 09/28/2024
A Steward spokesperson did not say on Saturday if de la Torre will remain a major shareholder in the company he helped found in Boston in 2010.

De la Torre, the subject of several Globe Spotlight Team reports this summer, confirmed through his personal spokesperson that he has “amicably separated” from Steward.

“Dr. de la Torre urges continued focus on this mission and believes Steward’s financial challenges put a much-needed spotlight on Massachusetts’s ongoing failure to fix its healthcare structure and the inequities in its state system,” read a statement from his spokesperson, Rebecca Kral.

Initial reaction to the end of de la Torre’s reign at Steward was harsh.

“Fourteen years too late,” said Ellen MacInnis, a nurse at St. Elizabeth’s Medical Center, who testified at a congressional hearing about concerning and unsafe conditions at the Brighton hospital due to years of Steward’s neglect.

Julie Pinkham, executive director of the Massachusetts Nurses Association, said, “We hope such a move in no way diminishes a full review with full accountability for all that has occurred under his watch.”

Paul Hattis, a senior fellow at the Lown Institute, a health care think tank in Needham, noted the bankruptcy process had effectively already removed de la Torre from the day-to-day control of the company.

“From the perspective of trying to bring value to a health care organization and the people that it serves, he resigned many, many years ago,” Hattis said. “It all became about him, and not the mission.”

Senator Elizabeth Warren, Democrat of Massachusetts, bid “good riddance” to de la Torre, in a statement. “Ralph spent nearly two decades sucking every last bit of value out of Steward Health Care, and while the hospitals got poorer, he got richer.”

On Wednesday, the Senate unanimously moved to refer a criminal contempt charge to the Justice Department after de la Torre ignored a congressional subpoena to testify before one of its committees.

Warren said de la Torre’s resignation would not absolve him from accountability, and that he would still have to answer for failing to respond to the subpoena. “Ralph is not off the hook yet — the authorities still need to prosecute Ralph’s contempt charges and investigate him for other possible crimes he may have committed as Steward’s CEO,” Warren said.

De la Torre was essential to the founding of Steward. As CEO of the former Caritas Christi hospital chain, a struggling network of six Massachusetts hospitals owned by the Boston Archdiocese, de la Torre sought out investors that could recapitalize Caritas. He ultimately struck a deal with the New York private equity firm Cerberus Capital Management, which bought the hospitals and put them under a new affiliated company, Steward. De la Torre remained at the head of the for-profit business and immediately set out to grow the chain.

After growing slowly and struggling to maintain a profit, Steward in 2016 made a $1.2 billion deal with Medical Properties Trust, a real estate investment trust, under which MPT came to own Steward’s hospital buildings and land, which Steward leased back. Most of the windfall from the sale went not to improve care, but to pay dividends to Steward’s owners, including de la Torre. High lease obligations to MPT contributed to Steward’s unbearable debt, around $9 billion, according to bankruptcy filings.

De la Torre’s abrupt resignation comes at a time when many observers were questioning why he was still atop Steward, when he faces possible prison time for defying a congressional subpoena and is being investigated by US and international grand juries.

De la Torre’s ability to hold onto power until now was largely a function of Steward’s board of directors, whose job it is to hire or fire the CEO and launch investigations of alleged misconduct.

The board — a tight-knit circle of company insiders and close business associates who reported directly to de la Torre — has been silent on the CEO’s travails, and remained so with Saturday’s announcement. The board’s inaction had alarmed many inside and outside the company, who said it was a textbook case of corporate cronyism and the perils of insular boards.

Starting in July, the Globe reached out multiple times to every person who served on Steward’s board in the last four years about their oversight of the company and knowledge of de la Torre’s financial dealings. All either declined to comment for the record or did not respond to interview requests.

“Two questions,” said Lawrence A. Cunningham, director of the Weinberg Center for Corporate Governance at the University of Delaware, after de la Torre’s announcement: “Why did it take so long for the board to act? And why did they choose to accept his resignation instead of terminating him for cause? Termination for cause would have eliminated any ongoing perks, while resignation allows those benefits to continue.”

In Quincy, Catherina Brancaccio received the de la Torre news with shock and dismay. For three years, Brancaccio and her family have been seeking accountability for the death in 2021 of her 31-year-old nephew, Gilberto Melendez-Brancaccio, who died alone in an understaffed emergency department in Steward-owned Carney Hospital, now closed, in Dorchester.

“He left a trail of death and chaos in his wake,” said Brancaccio, of de la Torre. “I pray that he will be held accountable despite his resignation.”

Hanna Krueger, Chris Serres, and Elizabeth Koh of the Globe staff contributed to this report.
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