It's Night Side with Dan Ray. I'm w b Z Constance video.
Thank you very much, Kyle was we move into the nine o'clock hour. I'm delighted to well a guess that I had kind of lost touch with. He was a former is a former state representative at the State House. I knew him in that capacity. He now works as a professor of a practice in the area of healthcare at the chan Harvard School of Public Health, Professor John McDonough. I don't want to say what I want to say
representative of professor. We'll keep it at professor fan now, But John, how are you welcome back?
Welcome back. It's great to renew an old acquaintances.
Great to be with you, Dan, and please just call me John.
Okay, we can leave it at that. We want to talk about the Stewart health crisis here in Massachusetts, and as I mentioned last night, we're going to stay with this story because I think it's an incredibly important story. Let me start off with the general question and then we'll get to a more specific question. Is this a crisis that is unprecedented or is this happening with other health groups in other parts of the country.
Well, so, there have been closings of hospitals and hospital chains all over the country for profit a nonprofit, and some of them have involved so called private equity financing, and some of them just run out of gas and
don't have the support and the resources to survive. So we've been seeing a shrinkage of hospitals going back at least fifty years or even more, as as medicine gets more complicated and specialized, and as as smaller and smaller facilities find it harder to keep up to and to maintain themselves financially and sufficient workers and otherwise.
This is special because of the uniqueness of the story.
A former Calcolic hospital chain that was highly respected and loved by its patient population and its workers sold in twenty ten to a private equity chain out of Wall Street in New York. The private equity.
Firm is known as Cerberus cer b E r U s.
Cerberus is actually a Greek myth that is a three headed dog that is supposed to be guarding the gates of hell.
Well, there's we could carry that metaphor a little bit. By the way. The former chain carriedis Christie was the Catholic hospital chain and this This was caused, probably ironically in some part, maybe a big part, maybe a small part, but at least in some part by the the priest pedophile priest crisis that broke around the turn of the twenty first century here, you know, and that sort of created a need for the Catholic Church to find uh finances, money to to pay victims. Am I misreading that?
I'd say that was that was a substantial part of it. That we we had the new archbishop and then Cardinals Sean O'Malley come in really wanting to turn things around and find in the archdiocese, in the Catholic Church infrastructure, and finding that the decisions that were forced on him in terms of being the owner of sophisticated chain of acute care hospitals and other facilities was.
Quite a distraction.
Also, in addition to the scandal which had done real damage to the reputation of the archdiocese, there was also an underfunding of pensions in the archdiocese, both in the carry tasks Christie system itself and beyond, and so the archdiocese had a big problem financially in terms of needing to invest and find the money to make up for
the short payments to its pension front. Over a good number of years, there were some major issues both in terms of the reputational scandal and the payments to victims, but also the underfunding of the pension system and other related issues that really came together by two thousand and five, six, seven and eight for the archdiocese and Cardinal O'Malley to say, listen,
we've got to extricate ourselves from this. This is a big distraction and we're really not confident to be able to address all the pieces, and so looking for a solution.
And so one of their first challenges in two thousand and eight was looking for a new president of the system and there was a rising star surgeon at the Beth Israel Deaconess Medical Center by the name of doctor Ralph Delatori, who had created a super practice of cardiac surgery at Beth Israel Deaconess, was a star started his own center at Beth Israel, and he was interested in looking for leadership opportunities in the health sector and applied for and got the job in two thousand and eight
as the CEO and President of the Carrie cass Christie Hospital System and took on that and a lot of people were excited and said, this is a real burst of electricity and energy in terms of reviving the system. And then things started to turn.
Well they were.
We're going to start to talk about that turn, and when we get back, we can focus on a now very controversial ralph.
Is it pronounced dilatory? Is that the correct tranciation?
Ralph delatory deleatory?
Okay, who I guess spent part of the Olympics on his yacht and part of his Olympics at Versailles, watching some of the drissage equine equestrian competition, which we'll talk about, And I also just want to talk about invite folks if they'd like to join the conversation.
I think John.
I don't want to say that he knows this better than anyone, but I think there are a few people who would know it better than John McDonough, and I'm delighted that he's been able to join us tonight. So I will give the number just quickly six one seven, two, five, four ten thirty or six one seven, nine three one ten thirty. John has been kind of indicate they'll be happy to take phone calls and try to answer questions. I know a lot of you have questions. That's why
I'm doing this. I feel it's important for our audience. We talked about it for an hour and a half last night, but John is so much better versed in this than I am. I am indubted to him for being available tonight to answer some of my questions in your questions.
My name is Dan Ray. This is Nightside. We will be right back after these messages.
Now back to Dan Ray live from the Window World night Side Studios on WBZ News Radio.
Joining us is Professor John McDonald, former state representative from the Boston area. He has been with the chan Harvard School of Public Health since twenty eleven, so he has been observing this process before we go to phone calls. Just a couple of things. We talked today a little bit about what has been going on. And you basically feel that the doctor Delatory is a villain in this story. Not trying to put words in your mouth, but I
think you made a comparison today. If you want to share that with the audience or tell me, tell me how how you feel about his role as honestly as you cannot appreciate it.
Well, So, doctor Delatory is the person who made the relationship to take the Carrycoss Christie chain in twenty ten and turn it into Steward Health owned by the Serberus private equity firm, and turning it into a for profit hospital system, which really was a financial toy for the serverist folks from New York.
Private equity is a.
Controversial financing vehicle in the United States and around the world, especially in the United States, and it's especially dangerous when it gets involved in healthcare and medical care because the heart and soul of medicine is that the patient comes first, that it's about the patient relationship and their needs. And the heart and soul of private equity is that profits are first for the central shareholders, and everything else comes second, third, fourth,
or doesn't even make the list. And so there is a fundamental contradiction here in terms of the values of what private equity is and what most of us see
as essential about our health and medical care system. And so Ralph by putting it in the hands of a private equity firm, and then after the Attorney General stopped watching in twenty fifteen, basically took all of the real estate in that the former car Carrie Tusk Christie Chain held the buildings the land for all of the eight hospitals and basically sold all of the real estate to another financial firm, kind of firm called a retri t
of state investment trust. And they basically pay the Cerberus folks a large amount of money in exchange for getting all their property. And now they're the landlord. And so the folks at Saint Elizabeth's, the folks at Good Samaritan and Brockton no longer own the building and land on which their facility resides and have to actually pay exorbitant rental payments way way way into the future that take
away from the money. And meanwhile, most of the proceeds from the sale of the land and property go to the reach the real estate investment trust. And this is a formula, This is a process which basically kind of bled this system dry and precipitated what is now the bankruptcy and as we speak the dissolution of this shame. We hope it may lead to a better place, but we have no guarantee of that at all, because we still have these Wall Street firms that are calling all the shots.
Well, we have two hospitals which we know are going to close, including Corning Hospital, which is a bedrock of the Dorchester community.
And there's another hospital in Heir which.
Is about Nashoba Valley, closed.
By the end of the month.
And then there's another five or six hospitals which are in jeopardy of closing. I know that there was a deal today of a sale of there I guess the doctors. What's called stewardship five thousand employed and affiliated physicians in Massachusetts and nine other states.
This is a huge deal. That deal was.
Two hundred and forty five million dollars. I don't know how they sell doctors, but that's apparently we're with the regulators here in Massachusetts. When all of this hijinks was going on, I mean, someone should have at some point been saying, slow this process down.
What are we getting into? Who's involved here? Where were there?
So the.
Carrie TuS Christy chain was sold to Cerberus to become steward in twenty ten, and it had to be approved by the Attorney General. Then Martha Cokeley was the Attorney General at the time, and when she approved it, because the archdiocese was bleeding and needed the revenue.
To come from the sale and they wanted out of it. And there were.
Literally no other institutions in Greater Boston or Massachusetts that came forward and said, yeah, we would like to take over ownership and responsibility of this. So Cerberus was kind of the only player in town that was willing to come forward, and so we have a lot of public process, a lot of public hearings. Martha Cokeley allowed the sale to go forward and it became Steward under Cerberus. That and that arrangement then had five years of close financial
monitoring by the Attorney General's office. One of my former colleagues at the Harvard School of Public Health, Professor Nancy Kane, was the actual financial monitor and she paid very close attention and gave a lot of oversight and informed the
Attorney General of everything going on for five years. But the deal was only oversight for five years, and then once the oversight ended in twenty fifteen, then Stewart and Cerberus were free to go their own way, and that's when they sold the real estate out from under the institutions and started the process of just Senator Elizabeth Warrenkat and Senator Marky call it the looting of this This former hospital chain and so so, so that's that's one piece and you can look at it stage by stage
and see the process.
But it was after the five.
Years of oversight things really started to go south in terms of what was going on in that system.
So once the five years of oversight ended, at that point some of us was able to do whatever they want. There was there was no regulation and whatsoever, no oversight.
There actually was. We do have we do have a healthcare financial Oversight group called it's called CHIA CHIA, which is a Center for Health Information and as it's a wonderful agency and every acute care hospital and like Stewart, has to provide extensive financial information every single year. And for the first five years they provided that information and once they were out from under the thumb of the Attorney General and were free, they stopped providing any information.
And SIA actually took Stewart to court and has been unable to get resolution in terms of that action. So it's been about eight to nine years now where they have done no financial reporting to the state as they are legally required to do, and so there are definitely issues the are in terms of what went wrong that they could get away with this, and the legislature right now is trying to toughen that loss so that we'll never see a situation like that again.
That should have been a huge red flag. I guess they refused to file financial reports with Massachusetts regulators for years before moving the headquarters from Boston to Dallas in twenty eighteen. Try not thriling your tax returns with the irs and see how long you can get away with that, real quick, if I could, how much did seahbus pay for this whole shooting match back in twenty ten?
Approximately?
If you know, I'm forgetting the number I can that I can find out and get it back to you who have no.
Problem, no public I don't remember. So then after.
Five years twenty fifteen, at that point, that from twenty ten to twenty fifteen covers the governorships of Governor Deval Patrick into the first term of.
The Baker administration.
And did the Baker administration drop the ball in not providing whatever oversight was necessary after this five year period expired. It just seems to me that this company, all of a sudden, it was the inmates running the asylum. After the five years were up, they behaved themselves for five years, and after five years they thumb their those that the State of Massachusetts regulators.
I mean, just I'll tell you so. In in twenty ten, a Cerberus paid eight hundred and ninety five million dollars to buy the carry Task System.
Okay, what is its value today? If any I know it's invasorancy proceeedings, but.
It has its value today.
I haven't seen any really good. So nobody's looking at the value of the whole chain right now because it's being broken up piece by piece. And some places like you have Norton Hospital that had Norwood Hospital that has been closed.
For that was hit that was hit with a flood.
Okay, so so so I'll give them a break on that right that was hit by a flood. But you have these other hospitals. I don't understand how hospitals go out of business, to be really honest with you, it seems to me whenever I've known anyone going to a hospital, you get you get charged for everything down to an aspirin, and you know, which is understandable, but.
Boy, what a what a mess. John.
Let's take a break. I want to open up the phone lines. Give folks there's a couple of folks waiting. If not, we'll open up phone calls. You've explained this extraordinarily well. Obviously, this is a lack of oversight and nobody, nobody identified this problem. It's like I just came back from Pompeii in Italy. It's it's almost as if you're next to Mount Vesuvius and you say, you know, I got a bad feeling here that this thing might erupt.
This is our own little monk Vesuvius without the lava here in Massachusetts, because it's going to affect a lot of people adversely. Six one seven two thirty six one seven nine thirty. My guest is Professor John McDonough. He is a professor of the Practice of healthcare at the Harvard chan School of Public Health. He knows this situation very well. He's explained it extraordinarily well. Uh, and we'll take some more questions. I have plenty of questions, but I want to open it up for you to get
an opportunity to spark to speak with Professor McDonough. Not only where we go from here, how did we get here? And is there any resolution that might that just might provide a good solution or a livable solution here in Massachusetts. It looks to me like this is a train work, a train wreck in slow motion. Hopefully John McDonough will be able to convince me that that characterization is incorrect once we get back right after the news at the bottom of the hour.
My name is Dan Ray. This is Nightside.
Night Side with Dan Ray on Boston's news radio.
My guest is doctor John McDonough was with the Cham School of Public Health at Harvard University. Doctor McDonough, I want to go to phone calls. We've had people holding on here, so I've got a whole bunch of questions. But you have explained this so well. My last question before we go to break, so if all of this happened in twenty and fifteen and the oversight was withdrawn
by the regulators. Governor Baker was in charge of the state at the time, he was running for well, he was still really in his first He started in twenty fourteen.
He started twenty fifteen.
This was twenty fifteen, I know that, but start he.
Got elected in fourteen until so he.
Was he came on board as this thing was starting to become what was lacking regulation oversight.
Was he where what was going on?
I have not heard him explicitly say what he knew and what he didn't know. We know that he was paying attention, particularly his Health and Human Service Secretary Mary lou Sutter's was paying attention to it. There is a desire on the part of the administration and the state to not want to intervene in the affairs of a for profits system that has lots of sources of financing on its own, and so there's an interest in making sure that patient care is appropriate and up the snuff.
And uh and Ralph was a good salesman. Ralph DELLATORI the the CEO of the system, and did a lot of a lot of letting, you know, put putting forward a good story about what was happening.
And uh and uh.
There there were so many challenges, you know, just talk about you know, Governor Baker and the m bt A and all of those are just just for starters. So so and and I'd say this is true of Governor Heally today.
There's not there's not.
A desire to have to take taxpayer money in Massachusetts and use it to prop up or rescue a for profit system like this and so, and so you can look back and hindsight is just a wonderful gift to have. But you know, there was this expectation that they had enough resource verses that they would be able to work
it out and sustain themselves. And that turned out to be tragically incorrect, because I think there was a misjudgment about doctor delator and what his game was and what he was really about.
Did did Governor Baker have a relationship with doctor Delatora? I mean, governors tend to know the moves and shakers in our society. Was there any interaction between the two of them.
Yeah, from the best of my knowledge, there there was an interaction and and uh uh uh and doctor Delatoria would talk directly to the governor, and so yeah, I think I think there was there was a relationship. And uh, you know, I don't know. I don't have precise information on how deeply the state leadership engaged because they had many other challenges and and didn't see that it was their job to come in and uh, the heavy handed monitor of a for profit system.
All right, let's get the phone calls. Six.
Let me go start it off with Robert Is in Quincy, Massachusetts. Let him get to Robert. First off, Robert, you were first up with Professor John McDonald.
What's your comment of question?
This is a loaded one. My first comment is, having worked in the healthcare field, we all know about Stewart. We know about the chairman. He has a nice, big boat. He has profit. It's all about profit and it's too good to be true. Charlie Baker worked as an executive for haved Kilgrim. He knew all about health care. He did.
And we want to go back one more. We have comforts health care Potter Stewart, and they shut it down. Seventy thousand people, patients like myself. We're out and about without doctors. Now let's go over to Nowen Hospital. The hospital has a flood. They stop building the hospitals. Then all of a sudden they stop in their tracks because it's going to cost them money. And the Connie's one. I live in North Quincy. There are people in dorchesterday desperately need that hospital.
We know that, Robert. But what I'm trying to do is, well, Robert, stop yelling at.
Us, Okay, sleep for me.
I favor take his audio down. Robert, if you want to ask a question.
If you want to have a conversation with Professor McDonough, that would be great. But I didn't bring him on here as a guest to listen to people yell at him. So do you have a question for Professor McDonough, Go ahead.
Robert, Professor McDonough and also a state rep. I listened to you and Dan Wright. I have a lot of respect for both of you. Well, what I don't have a respect for somebody's sleeping at the wheel and what do I mean? And this is the question. You stated that when they came off this uh receivership or whatever you want to call it, nobody did nothing. Now, shlie Baker.
It wasn't receive It wasn't a receiver, David. Let's you've already made that point. Let's if there's a question, great, If not, I'm going to go to some callers.
We have a question. Go ahead, Robert, if there's.
John, tell me why nobody took the time and effort to hold a finger in the damn It's all about profit?
Okay, do you want to make your speech? Thanks very much for you call. Robert.
I didn't perceive a question there. You want to comment on his his screed John, I.
Would just say that I totally resonate and respect and feel his anger.
Uh.
And he mentioned Norwood, he mentioned Compass, he mentioned Carnie. He also could have mentioned Quincy Hospital, which which Ralph Delatori took under Stewart's wing and then ended up closing it. The speaker of the House, Ron Mariano, will never forgive that because he feels like he was personally misled about the situation and about what would be done, and thought he had promises that Quincy would stay open and it
wasn't true. So I think Robert's anger, I resonate with it, I feel it, and I feel like there are people all over Greater Boston who have a similar feelings.
There's a lot of betrayal that kind of doesn't come out in the.
Discussion about chapter eleven and bankruptcy. But I just I want Robert to know I think his anger and his frustration are totally justified.
Yep, okay.
As I said, I was doing my best to get a question, but we didn't. We got we did get his anger and frustration very clearly. We'll take a break. We have a couple of lines at six, one, seven, nine, thirty, going to go to Joe and Lynn Joe in Plymouth, Mark and North End Over Ladies feel free to jump on board as well. Coming back on Night's Side with Professor John McDonald of the Harvard Chant School of Public Health.
Right after this, Now back to Dan Ray live from the Window World Night Side Studios. I'm WBZ News Radio.
Okay, I'm going to look folks because of my tough time with Robert there questions. You got a question you've been waiting, I'll give you an opportunity.
Let's have at it. Let me go to Joe. Joe, you're on with professor.
Hey, Dan, thank you very much, and this is an excellent subject, Robert. I hope that when we're off the air we give a number to get in contact with you. Have a few things I'm want to say.
You know what we don't We don't We're not doing connections here. Joe, I have a guest. If you want to ask a question. Have I move on to someone's going to ask my guest a question?
Go ahead, Joe, Yes, I did. My question is can we put the hospitals back the way they used to be? Because Saint Elizabeth used to be a good hospital now I know someone that went there is having a lot of problems with it, and other hospitals they've gone down the tubes, and I'm disappointed in Stewart and Lynn hospitals closed like your comments on that.
Okay, John, is there any hope here or is hope you know slim and none and Slim is just left town.
I think it is possible, It is possible that we can come out of this, and not for every institution, but for most of them in a better situation than we were in under Stuart. There are, in fact, and it's not it's not public, and so I can't I can't say who's gonna do it, but there are for at least about five or six of the institutions, there are Massachusetts based nonprofit and community based hospitals that are looking to acquire one or the other of the Stuart hospitals.
And so that is a that if.
That plays out the way that people are saying beneath the surface, that could be a real positive, and we could.
We wouldn't.
We won't go back to a carry toss Christy chain. That's just not going to happen. There's no one in a position to do that, but some of our our real solid community based institutions are we understand stepping forward and have made bids and we think that that's the direction that a lot of this is going to go, So we could end up in a better place.
So potentially without telling us who might be involved, are we talking about something that might resolve itself within a month or within a year?
This is short term? Yeah, no, this this this would be this would be settled relatively quickly, and the state will be playing an important supportive role in providing some advanced financing to help make these deals and arrangements move forward. So yeah, and regarding Lynn Hospital, I still believe it was a real.
Tragedy that Lynn lost.
It's only the hut Care Hospital and yeah, that's but understand what's been going on since the early.
Nineteen nineties Massachusetts.
And this is back when I was in the legislature and I opposed it, but Massachusetts made a decision to say we are done with state regulation in terms of trying to determine the fate of the hospital system in Massachusetts. We think that the market is a better way to do it. And so we've really had about thirty years of having the market much more involved in the fate of our hospitals rather than community planning and really trying to understand the need and have government play a proactive role.
In the nineties, we sort of had this idea, Oh, government always messes it up. We can't rely on government, and I think we're paying the price for that politics policy decision more than thirty years ago.
Now, all right, Joe, good question, Joe. I got others that want to get to Okay, appreciate it.
Question. Good night, market, north end of the market. You got to be quick for me. Go right ahead.
You're all with Dan doctor. Thank you, Dan doctor, thank you for the time. Uh, the long story short. I know servers well, I know truere quite well. They're a client. I ran the technology for them. The question is where does the tough love come from here? Everybody expects that when they call nine one one, they're going to the best in care. That's not that's no longer possible. Where does the tough love come from here?
The immediate tough love is that is that every acute care hospital operates under a license issued by the Massachusetts Department of Public Health, and so when something goes awry, when something goes wrong.
Uh.
The first place is what is the Department of Public Health understand and what are they doing? They are kind of the boots on the ground, the first people in there, and in fact, throughout this whole crisis, since it emerged about six months ago at the start of the year of the Department of Public Health has in fact had monitors and observers in every one of these steward facilities just to make sure that the quality of care is at the level that people have a right to expect it to be so.
But there are higher levels as well.
There's something called the Massachusetts Policy Commission, which has some really terrific people that do financial analysis and understanding. So yeah, there are a lot of different players involved in this, but Department of Public Health is the go to entity in terms of immediate reaction and oversight.
Mark, great question. I appreciate it very much. Thank you, Thank you, sir. Let me go next to Uh. I'm going to go to John in debthim. John, you got to be quick, but getting tight on time with Professor John McDonald.
Go ahead, John, Okay, I'll be very quick. I'm a little biased. I was born I said, Elizabeth. My mother worked there for twenty five years. But my question is you mentioned that they the Stewart sold the real estate after they purchased the hospital chain. Is that accurate?
Yes?
And then when they did that, who profited from that individually? And can anybody be held criminally responsible for this whole thing? And I'll listen to you, gentlemen, thank you.
Okay, well, good question, go ahead.
Yeah, it's a great it's a great question. I'll just tell you that what they did. So in twenty sixteen, Cerberus and Steward sold all the real estate to this reach real estate investment trust called Medical Properties Trust down
in Atlanta, and they took the money. A lot of it went straight into Cerberus's pocket, about five hundred million uh and some of it Ralph Tellatory, the president of the CEO of Stewart, used it to go on a buying spree of other hospitals around the country with the money from the real estate, so that by the year twenty twenty before everything crashed, Steward was the largest for profit hospital chain in the entire country. Out of nothing very quickly. So basically they took the money and they
went on a buying spree. And now it's all crashing all around them.
Now in twenty twenty, it seems to me that there would have been a lot of people going to hospitals for COVID related problems, and that that would have made hospitals more valuable. And how hospitals run out of money or put themselves out of business is beyond me. I have never gone to a hospital, looked at a bill and said, Wow, they only charged me so much.
What's going on?
John?
So the big money for her hospital for acute care hospitals and surgeries, and in the COVID crisis, they had to suspend a lot of their surgeries. So the only reason most of them didn't go bankrupt during COVID was because the federal government came in and just smothered them in federal cash to tie them over during this period where they couldn't do it. And then they came out of that and they came back into relatively healthy shape where they are for the most part now.
But COVID was not a.
Financial boon for the institutions at all.
I'm going to try to steal one more minute. Rob and Dan and I want to become in a Bob in Brockton. Bob you late. I got only a minute for you. What can you do.
I'll make it quick. I'll make you quick. The question to John is it looks like this is a profit type thing. Where is it leave the County Hospital? The County Hospital really serves in between bars. It's been in social hospital. We really can't afford to close its matter of fact, my doctor is a specialist in gastrology. Because the hospital is closing. Yep, he's retiring.
Okay, we got it, Bob, Bob, we got the question. I think you're not going to be happy with the answer. The Connie Hospital is due to close the end of this month. Am I correct on that?
John?
That is correct, And I think there's a lot of people who are very angry and upset about that. It's a tough judgment called by the Heally administration. I think they need to do a better job coming out and explaining everything that went into that decision.
Bob, not the answer you wanted, but it's a straight answer. Thank you, my friend, Thank you, John McDonough, Thank you for your time tonight. A great explanation. Whether people like the answers or not, that's the reality.
John. Love to have you back. Let's keep in touch.
Okay, great to be with you, Dan, thanks for keeping me on. It's great to connect with you.
My pleasure, my pleasure. Thank you very much.
When we get back, if you want to keep talking about this light, the lines up. If not, we're going to talk about bike lanes in Boston. Coming back on Night Side right after the ten