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Washington, D.C. – Today, Senators Ed Markey (D-Mass.) Elizabeth Warren (D-Mass.) introduced the Corporate Crimes Against Health Care Act of 2024 to root out corporate greed and private equity abuse in the health care system.  

Over the last decade, private equity fund assets have more than doubled, totaling $8.2 trillion in 2023. While private equity funds have purchased companies in nearly every sector of the economy, their aggressive deal-making in the health care sector poses grave risks to patient health and raises questions about potential abuse of taxpayer dollars, as private equity companies routinely load up portfolio companies with usurious debt, sell off valuable assets, and extract exorbitant dividends and fees—regardless of how their investments preform. 

Unfortunately, lax corporate accountability and transparency laws have provided cover for private equity’s parasitic practices, allowing executives to plunder hospitals, nursing homes, provider practices, and other health care entities with impunity.

In Massachusetts private equity greed and mismanagement by Ralph de la Torre and top executives drove Steward Health Care (Steward)—which operates eight hospitals in the state—into bankruptcy. The company’s problems began in 2016, when company executives and Steward’s then-private equity owner sold the hospitals’ real estate to Medical Properties Trust (MPT), a real estate investment trust, saddling the hospitals with extortionate rent payments that ultimately landed Steward in bankruptcy. 

“What Dr. de la Torre, Cerberus Capital Management and Medical Properties Trust did to Steward-owned hospitals in Massachusetts and across the country is unforgivable. They promised to improve health care, but instead traded lives and livelihoods for profit. Private equity firms and their enablers will continue to steal from America’s health care system to feed their corporate greed unless we stop them. We need guardrails now to guarantee CEO wealth doesn’t come before the public’s health,” said Senator Markey.

“My Corporate Crimes Against Health Care Act would prevent what happened with Steward from ever happening again,” said Senator Warren. “When private equity gets hold of health care systems, it is literally a matter of life and death, so if you drive a hospital like Steward into bankruptcy, putting patients and communities at risk, you should face real consequences.”

It is past time we hold private equity firms and corporate executives accountable for driving companies like Steward into bankruptcy—and empower regulators to prevent similar crises from happening in the future.  

The Corporate Crimes Against Health Care Act will:

• Create a new criminal penalty of up to 6 years in prison for executives who loot health care entities like nursing homes and hospitals, if that looting results in a patient’s death.
• Provide state attorneys general and the DOJ with the power to claw back all compensation, including salaries, issued to private equity and portfolio company executives within a 10-year period before or after an acquired health care firm experiences serious, avoidable financial difficulties due to that looting.
• Authorize an associated civil penalty of up to 5 times the clawback amount.
• Prohibit payments from federal health programs to entities that sell assets or use assets for a loan collateral made to a REIT, with an exemption for current arrangements; repeal a rule in the Tax Code that allows taxable REIT subsidiaries to exert influence on  the operations of health care entities; and remove the 20 percent pass-through deduction, passed in the 2017 Trump tax cuts, for all REIT investors.
• Require health care providers receiving federal funding to publicly report mergers, acquisitions, changes in ownership and control, and financial data, including debt and debt-to-earnings ratios.   
• Mandate an HHS OIG report to Congress on the harms of corporatization in health care.

“Private equity firms have made a killing out of looting vulnerable hospitals and putting patients and healthcare systems at risk. Grounded in the common-sense idea that U.S. healthcare systems should prioritize safeguarding our long-term health over short-term profits, this legislation is a necessary and timely solution to that problem.” - Chris Noble, Policy Director for the Private Equity Stakeholder Project

“As an organization representing frontline nurses and health professionals working in facilities owned and operated by private equity firms and other for profit  providers, we have witnessed how the commodification of health care and the strive for profit taking by these firms has undermined the safety of the patients and communities served by those facilities, and as such, we applaud and support Senator Warren’s legislation that will hold these firms accountable for their misdeeds and corporate malfeasance, to claw back those resources taken from our patients and our communities to ensure those resources go to the care of patients and not their exploitation.” - Katie Murphy, RN, President of the Massachusetts Nurses Association

“Today’s bill represents a major step towards ensuring private equity and corporate executives are no longer able to unjustly enrich themselves through non-cash compensation such as share buybacks or dividend payments that come at the expense of the financial health of hospital chains and quality of care for patients.” - Andrew Park, Senior Policy Analyst at Americans for Financial Reform

“The crisis at Steward health care illustrates the risks of allowing private equity and corporate America to play financial games with our public health care dollars. Hospitals become real-estate investments, clinicians become financial assets, and patients suffer the consequences when a risky investment scheme goes south. We commend Senator Warren for her efforts to prohibit the most extractive financial practices in health care, increase transparency of ownership, and better understand the impact of health care.” - Hayden Rooke-Ley, Senior Fellow for Health Care at the American Economic Liberties Project

"Workers at hospitals across the country are calling out the failed private equity playbook of gutting patient care to maximize profits, a model that benefits owners and hurts healthcare patients, workers and the communities they serve. Healthcare should be affordable and accessible to all, but private equity investors view it as just another industry to strip for assets and hawk to the highest bidder, while banking stratospheric fees. Patients need investment and oversight to ensure they receive the care they deserve—and workers need employers that provide safe conditions and fair pay, but private equity is focused only on the shortsighted goals of slashing staff and cutting costs, at whatever expense. The expiry date on this broken model is long past due—I applaud Senator Warren for introducing the Corporate Crimes Against Health Care Act.” - Randi Weingarten, President of the American Federation of Teachers

“Unchecked private equity is, simply put, a metastasizing disease threatening health care in this country. The profit-driven health care system in this country is: expensive, inefficient, and inaccessible to those who need it most.  And private equity’s growing foothold is making these problems – tenfold. It’s contributing to our medical debt crisis, worsening health outcomes, and creating unsustainable working conditions for many health workers. It is far past time to put the needs of people over profits. Senator Warren’s bill is an important and significant step in that direction.” - Mona Shah, Senior Director of Policy and Strategy at Community Catalyst

"Our health care system works best when quality care is accessible and affordable.  Unfortunately, private equity has been a scourge on our system by hollowing out hospitals, reducing services for patients, and cutting staffing levels. This legislation marks a crucial step toward accountability for the role private equity plays in our economy." - Bilal Baydoun, Director of Policy and Research for Groundwork Collaborative