How could this have happened? De la Torre’s letter ticked off many reasons: rising interest rates and labor costs; more people on Medicaid, which doesn’t pay hospitals enough; and free care provided to undocumented immigrants.
He left out one: Ralph de la Torre.
A cardiac surgeon who wanted more, de la Torre had never run a hospital when he took command of the six troubled institutions that would form the beginnings of the Steward chain. His plan to save them grafted aggressive for-profit business methods onto the traditional health care model. And for a time, it seemed to work.
Now the hospitals are staggering toward insolvency, but he emerges as a very rich man. And it is through a long stream of business decisions that de la Torre, his management team, and equity partners bear great responsibility for these remarkable facts.
First and foremost was the decision in 2016 to sell the buildings and land out from under the hospitals and then lease them back for multimillion dollar payments. That move took hundreds of millions in equity out of the chain and left the hospitals paying rents they can no longer afford. And then there was the company’s reported issuance in 2021 of a $111 million dividend to equity holders, including de la Torre himself, as the chain’s debts piled up.
De la Torre entered medicine with high ideals and unstoppable ambition. His talent and drive bowled over just about everyone he worked with, and his rise to power and eminence seemed inexorable.
But there was another side. Years ago, he told a friend that he was driven to be the best, not make money, but money was a way of keeping score.
At some point, it seems, he stopped keeping score and started running it up, allegedly at the expense of community hospitals wrung out like dishrags for their liquidity. He has been accused of draining the hospital chain of assets to support a lavish lifestyle, an allegation that de la Torre denies.
His Dallas mansion stands along a street with some mini-Versailles palaces behind ornate gates, in a neighborhood with the homes of George W. Bush and Mark Cuban; his $40 million superyacht has six bedrooms; his other boat has been called “one of, if not the, best performing large sportfish boats ever built.” His kids’ private school celebrated him in 2022 for providing at least $10 million toward a new science center on the school’s suburban Dallas campus, where preening peacocks strut on the grounds.
De la Torre is sensitive to the dissonance between his prosperity and the hospitals’ plight, but he doesn’t apologize for it.
“I can appreciate why people are quick to make this criticism but I also believe there are important facts to consider,” he told the Globe in written responses to questions.
He argued that it was largely the efforts of his team that kept the hospitals alive the past 15 years. And he has a point: No one else stepped up to save them.
“This has been the most stressful time in my life,” de la Torre wrote, “but more importantly, I know that it has been even more stressful for the communities we serve,” and the chain’s doctors, nurses, and patients.
Little sympathy is to be found among many who once admired him. The contrast between Steward’s financial crisis and de la Torre’s conspicuous wealth has offended many of the Boston elite who abetted his breathtaking ascent.
“I don’t have any respect for him,” said Jack Connors, former chairman of Partners HealthCare, now called Mass General Brigham, who in 2008 helped de la Torre land an interview for a job running hospitals for the Boston Archdiocese.
There was a time, said Connors, that people around here went into medicine to serve patients, not to “become billionaires.”
“Until Ralph came along, that was the way things were done in Massachusetts,” Connors said. “He played by a different set of rules.”
In reporting this profile of Ralph de la Torre, the Globe communicated with nearly 50 people who know him or had information about his work at Steward. Most asked to speak on the condition they not be named; many former Steward employees were concerned about damaging relationships by speaking out.
De la Torre on March 19 broke a long public silence on the Steward crisis, in response to questions from the Globe.
“I am doing everything I reasonably can to address it so that we can continue to keep these hospitals open and provide quality care to the communities we serve,” he said, in an email exchange facilitated by his lawyer and a company spokesman. He did not respond to requests for an in-person or video interview.
Four years ago, de la Torre said, as Steward faced immense financial pressure early in the COVID pandemic, its entire leadership team, himself included, threatened to resign in protest to protect hospitals when Cerberus Capital Management, a New York private equity firm and then Steward’s owner, wanted to put the chain into bankruptcy.
“When COVID hit, we pushed back aggressively against our private equity owners and fought to keep our hospitals open,” he said.
Michael Callum, Steward’s executive vice president for physician services, remembers de la Torre holding a number of resignations in his hand. “[De la Torre’s] the one who’s all of a sudden become the face of private equity in health care, and he’s the guy that had more fights with Cerberus than anybody to make sure we got them to do the right thing for patients,” he said.
In response, Cerberus denied knowing what de la Torre was talking about.
“Cerberus never recommended or even considered a Steward bankruptcy during the Covid pandemic, or at any other time during our ownership,” the company said in a statement to the Globe. “Nor do we have any knowledge of Steward management wanting to resign from their duties at any point in time.”
Cerberus sold its ownership stake in Steward in 2020, to a management group headed by de la Torre.
Nearly two decades ago, de la Torre made his name in health care as the prophet of the new community hospital: quicker and more efficient than the big guys, and close to the people they served. He made the point by advertising emergency room wait times on a digital billboard. The message was more important than the numbers: You think you could get seen at Mass General quicker than this?
Soon it was blindingly obvious to the Boston medical and political establishments that the heart surgeon who jumped into the business side of medicine was going places. He had that know-it-when-you-see-it presence that filled a room. He was brilliant, passionate, forceful, and almost hypnotically persuasive.
“You don’t want to get in his way when he wants to get something done,” said Andrew Stern, former president of the Service Employees International Union, which represents workers in Steward hospitals.
De la Torre once promoted himself as the ultimate reformer, recalled Andrew Dreyfus, former CEO of Blue Cross Blue Shield of Massachusetts. Now, with the benefit of hindsight, Dreyfus wonders: “How much of that was just an act? How much was true? I’d say it was some of both.”
In the beginning, it seemed de la Torre could talk anyone into anything, the way he talked his way in 2008 into running Caritas Christi for the Boston Archdiocese, the struggling chain that became the first building block of one of the country’s biggest for-profit hospital groups. Fortune Magazine in 2012 called de la Torre “Healthcare’s new maverick.”
The prophet had his dark side, too.
Many under him at Steward found de la Torre thin-skinned, suspicious, quick to anger, and nearly impossible to argue with because he could never admit being wrong.
And yet, when de la Torre chose to be charming, to beam positive energy in an employee’s direction, they warmed themselves in his glow.
“He almost had this ability to create this cult-like atmosphere,” said a former Steward employee, who was not the only one to describe Steward’s inner workings as a personality cult.
De la Torre, now 57, is from Jacksonville, Fla. The son of Cuban immigrants, he didn’t learn English until age 6. His father, Angel de la Torre, was a cardiologist who built a successful career in Florida.
A number of de la Torre’s former colleagues said he had an irresistible compulsion to prove himself. “There was always a belief,” said one former colleague, “that he had to prove to his father … that he could be just as successful on the business side of things as on the surgery side of things.”
De la Torre’s brother, Paul, 54, said having personal drive was just something Angel de la Torre taught his boys.
“Our father and uncle were the people who slept above the boiler room in their high school in Cuba,” he said. “My grandfather every weekend took the train with clean clothes for them and then took their dirty clothes home to wash them.”
From that modest upbringing, Angel de la Torre climbed to become the head of internal medicine at Calixto Garcia University Hospital in Havana but had to start over after fleeing Cuba after the revolution.
“He came to the US with literally one dime in the false part of his shoe,” Paul de la Torre said. “He built himself back up; he was the American dream. He would say nothing matters but what you have in your coconut, your brain. He wanted us to be driven, to work hard.” Paul de la Torre declined to discuss his brother’s wealth or business decisions.
Ralph de la Torre was educated privately at the Bolles School, a Jacksonville prep school, from 7th through 12th grade. His classmates voted him most likely to be “first to make a million,” according to the high school yearbook.
Quinn Barton, former class president who served on the yearbook committee, said the superlative was a reference to de la Torre’s soaring ambitions. “He was kind of a know-it-all, to be honest,” Barton said.
He recalled de la Torre commandeering class discussions and debating teachers. “It was in a dominant way, in a way that an attorney might be a bulldog in the courtroom, just pounding,” he said.
A former classmate who was closer to de la Torre, Clemente Inclan, hasn’t spoken to him for 40 years, but still fondly recalled his friend as a zealous denizen of the library, very confident in his studies because he put so much effort into his education.
On many afternoons, Inclan spent a few hours after school at the de la Torre household. The kids would hang out, play a little one-on-one basketball – de la Torre tried his hardest on every possession, Inclan recalls – until de la Torre decided it was time to put away the games and crack the books together to get ready for the next school day.
“He was disciplined — even though you got a buddy over at the house, he’s like, ‘Hey, let’s sit at the kitchen table. … And we would sit there and we would knock out the homework.”
De la Torre’s cousin, Randy Klein, grew up with him in Florida, fishing and diving from battered old aluminum boats covered in epoxy patches. He said his cousin was “uniquely capable” at pretty much everything. No matter the problem, people always seemed to turn to Ralph de la Torre.
“Yeah, it seems like he’s driven and that he accomplishes so much,” Klein said. “But I see a dichotomous side, where it’s just the curse and blessing of being so gifted creates responsibility that is unique to him.”
It is hard for others to relate to someone to whom everyone else comes looking for answers, Klein said.
“People, they can’t put themselves in that position. So it comes off as drive, as ambition, as aggression,” he said.
De la Torre graduated in 1988 from Duke University, worked a short stint as an engineer, and then enrolled in a highly competitive joint program run by Harvard Medical School and MIT. He trained as a surgeon at Massachusetts General Hospital, and met his first wife, Wing Cheung de la Torre, a native of Hong Kong, who was also training to be a doctor. His father wanted him to practice in Florida at a fat salary, but de la Torre preferred to stay in Boston, build his own career — and pursue the romance. They married in 2004 and had twin boys in 2008.
“At least in his early years as a resident and starting out in the medical world, one of the things that set him apart was he was very good to the little guy, you know, the people who mop the floors,” said a former colleague. “He would speak Spanish to them if they were Spanish-speaking. He was very good to medical students and nurses. He just had this ingratiating quality which was very notable.”
In 1999, de la Torre took a job at Boston Medical Center as a cardiac surgeon. From this toehold in elite Boston medicine, he relentlessly climbed.
A surgeon friend, Dr. William “Billy” Cohn, arranged in 2000 a meeting for de la Torre with Beth Israel Deaconess’s head of cardiothoracic surgery, Dr. Frank Sellke.
Once de la Torre got himself in a room with Sellke, he talked himself into a job at Beth Israel.
Paul Levy, CEO of Beth Israel from 2002 to 2011, recalled de la Torre as one of the “most talented cardiac surgeons in the city and maybe in the country.” De la Torre refined a new minimally-invasive technique to repair heart valves. He famously flew to Memphis a couple times a month for a year to practice in a lab stocked with cadavers.
“He would leverage what was known and put together new insights to try to provide operations for the sickest patients,” said Cohn, who is still friendly with de la Torre, though he said they have not been in touch for several years. He said de la Torre took on the most challenging cases. “Ralph was fearless.”
Even back then, Cohn remembered, de la Torre balanced his medical ambitions with a flair for the good life, such as nice cars. “He does have a taste for luxury and for nice things, and a lot of people do,” he said. “I wouldn’t fault him for that.”
The surgical field is renowned for towering egos, and yet de la Torre still managed to stand out for his self-regard and the need to be seen as the alpha dog, former colleagues said.
Cohn remembered one time presenting at a conference the details of one of his own patients, whom he had saved with surgery in desperate circumstances.
“The resident who was part of the case with me said, ‘This has got to be the save of the year,’” recalled Cohn. “And Ralph immediately chimed in and said, ‘Whoa, the year’s still early. You just wait and see what I’m going to do.’”
Around 2006, de la Torre made a major play for more power and responsibility, pitching a plan for a new CardioVascular Institute, a “hospital within a hospital,” at Beth Israel, bringing together cardiac surgeons, cardiologists, and radiologists under one business entity – with himself at its head.
“It was a great presentation to the board,” Levy recalled. “And conceptually the thing seemed to make sense. He was a freight train going through that board meeting.”
The new institute opened in 2007. But within a year, de la Torre was already looking for the next big thing. He leveraged a relationship with Brian Carty, former president of Hill Holliday, to get a meeting with Connors, who had co-founded the advertising firm. Connors was at the time chairman of Partners.
The meeting was the pivot point of de la Torre’s career.
“I said, ‘How can I help you?’” Connors recalled asking de la Torre. “He said, ‘I want to run one of your hospitals.’ “
Connors replied that he didn’t decide who ran Partners hospitals, but he did happen to know that the Boston Archdiocese was looking for someone to helm Caritas Christi Health Care, its financially-troubled hospital chain. Connors agreed to ask the archdiocese to speak to de la Torre about the job.
James Karam, 75, a Steward board member, chaired the Caritas Christi board in 2008, when it was looking for a new hospital chief. With the system’s financial troubles, talent was hard to attract. The board had three finalists but didn’t love any of them.
Then, “lo and behold, my phone rang one day, it was Jack Connors,” said Karam. Connors asked: Could you talk to this young surgeon about the job? After speaking to de la Torre by phone, Karam invited him to meet the Caritas board.
“Quite frankly, we were blown away,” Karam said. “He would talk like a great medical surgeon one minute. But he also understood the business of hospitals. He knew finance, he knew accounting, he knew what took place in the other hospital systems,” such as Partners and Beth Israel.
In April 2008, Caritas Christi put de la Torre, still in his early 40s, in charge of the six hospitals. It would soon be many more.
Caritas’s financial problems included a massive unfunded pension obligation for more than 10,000 current and former employees, which was a poison pill for prospective buyers.
“Ralph wanted to save Caritas, save the pensions, save the jobs,” said Stern, SEIU president from 1996 to 2010, representing much of Caritas’s non-nursing staff. The key questions at the time were: “Is anybody going to rescue Caritas? And under what conditions? Usually where there is some sort of rescue, somebody takes a haircut. There were no investors in this case, so it would have been the workers.”
What the chain needed was a cash infusion. In 2009, de la Torre sought a meeting with Robert Nardelli, the former head of Home Depot and a top executive at Cerberus. Over dinner, de la Torre sought advice for raising money for his hospital chain.
Nardelli was impressed by de la Torre’s energy and the breadth of his knowledge. He thought, “This guy had tremendous edge,” he told the Globe in 2010.
That conversation led to a proposed deal to sell Caritas Christi to Cerberus, and to transform the Catholic hospitals into a for-profit company. Under the deal, Cerberus agreed to provide between $430 million and $450 million to pay off the hospitals’ debt and assume its pension obligations. It also said it would invest at least $400 million to upgrade the hospitals.
Persuading the church, state regulators, and union officials to bless the deal was “multidimensional chess,” said Stern. De la Torre promised that employee pensions would be protected and that the hospitals would maintain their Catholic identity.
“It took someone like Ralph to get everyone to do a little of what they didn’t want to do to save the system,” Stern said.
Stern, who said he hasn’t spoken to de la Torre in a decade or more, credited his leadership with saving the hospitals in 2010. “He was definitely at the time of that purchase, without question on the side of the workers and community medicine,” Stern said.
After the sale, the company became Steward and de la Torre stayed as CEO, directing efforts to acquire more assets. Steward quickly gobbled up Nashoba Valley Medical Center in Ayer; Morton Hospital in Taunton; and New England Sinai Hospital, a rehabilitation hospital in Stoughton, among others.
Julie Berry, who was with Steward from 2011 to 2022 as chief information and chief technology officer, said de la Torre was deeply interested in the technology side of the business, which was key to his stated strategy of identifying inefficiencies and improving care while saving money.
“He allowed me to make decisions to advance things in technology quickly,” Berry said in a Globe interview. She believed “he was genuinely concerned about improving health care and making it more affordable. That’s why I went there.”
Another former high-level Steward employee, however, said that once the company grew large, its mission began to drift. “I thought we were actually going to do something different in health care and we would acquire hospitals and try to shake up the model,” said the former employee, who declined to be named to avoid hurting relationships with others connected to Steward. But once the chain went national, its focus seemed to shift away from “trying to make community health care real,” toward “how big can this thing be? And buying (corporate) jets – all that stuff.”
After four years of financial losses following its formation, Steward posted its first annual profit in 2015, according to published reports. Even as it crowed about meeting that milestone, Steward warned that staying profitable would be difficult, due to reimbursement rates from Medicare, Medicaid, and private insurers.
De La Torre ran his empire close to the vest, zealously guarding Steward’s finances and strategy. In 2017, the company sought a Suffolk Superior Court ruling that its systemwide financial data did not have to be shared with Massachusetts officials. When Steward lost that ruling, it appealed.
In the chain’s Back Bay headquarters, there was a “blackout room,” with walls engineered to block cell and Wi-Fi signals. Cellphones were useless inside, and the room could not be bugged, so secrets stayed secret. The C-suite was guarded by extra locks.
“There was always a certain level of secrecy,” said another former Steward official, “and nobody was sure what it was all about.”
The company also never seemed to have enough cash and routinely sat on invoices for months before paying them, former employees said.
“What’s happened to Steward, it was only a matter of time before the wheels came off of this venture,” said one Boston health care executive. “You couldn’t trust them for the commitments they made. You couldn’t trust them to pay you for the services that you provided to them. And this predates any financial trouble they had. This is a longstanding practice of theirs.”
In September of 2016, Steward announced a $1.25 billion deal with a real estate investment trust, Medical Properties Trust Inc., in which Steward sold hospital properties to MPT. The real estate investment trust then rented them back to Steward for multimillion dollar lease payments, which, in its current state, it cannot afford. Governor Maura Healey has called the rents “perhaps usurious,” a term often used to describe ruinously high interest rates. Steward said at the time it would use the sale proceeds to finance expansion, pay off debt, and return money to its private equity owner, Cerberus.
From the perspective of operating hospitals, the deal made no sense, said one of de la Torre’s former colleagues. “And then we all sort of nodded our heads and rolled our eyes and said, ‘Oh, now I get it. There are no plans to turn this into a viable set of community hospitals. It’s all about pulling money.’ “
De la Torre puts the responsibility for the real estate sale on Cerberus, which, he said, “controlled both over 90 percent of the shares and a majority of the board” at the time of transaction. “The ultimate decision was theirs,” he said.
A Cerberus spokesperson said de la Torre and his management team had operating control of Steward and controlled the relationship with MPT. “They originated and were strong proponents of the sale-leaseback transaction that supported management’s plans. The transaction with MPT would not have occurred without Dr. de la Torre’s consent and support given that he was the lead operating manager.”
In 2018, de la Torre relocated Steward’s headquarters from Boston to Dallas. Former colleagues said Texas was considered more business-friendly with less government interference, lower personnel costs, and no personal income taxes. De la Torre told the Globe that the chain needed a more central location as it expanded nationally.
That same year, de la Torre and his 90-foot sports fishing boat, Jaruco, named for a town in Cuba, took third place in a highly competitive anglers tournament hosted by the luxury Los Sueños Resort and Marina in Costa Rica, a country that was a favorite destination of his, Dallas colleagues recall. (The Jaruco should not be confused with de la Torre’s other boat, the 190-foot Amaral. Both boats are currently for sale, de la Torre said.)
He enrolled his kids in a private school in suburban Dallas. In 2022, the school honored de la Torre at the groundbreaking of its new science center. The center is named for de la Torre’s mother, Rosa O. Valdes, who trained in nursing and fled the Cuban revolution for the United States.
In remarks at the groundbreaking, captured on video, de la Torre’s voice sounded heavy with emotion. His once salt and pepper hair was now dark but for a conspicuous tuft of silver in the front. “What better inspiration than a woman, Hispanic, orphan, that has made it in science. And I thought, ‘I want to name it after her,’” he said.
In Dallas, de la Torre has apparently kept a lower profile than he did in Boston, where he knew almost everybody in health care management. He was described by people who worked with him in Texas as a highly guarded executive who kept a very tight circle of advisers. In 2019, he bought a house in Dallas valued at $4.7 million. The property, which he lists in court documents as his home address, has “a full bar… and looks out onto the loggia, cabana, pool, putting green, and large grassy area,” according to an online magazine feature on the property. He declined to answer specific questions about his compensation and real estate holdings but said his salary “is well below that recommended by outside consultants” the firm engaged in 2021.
At the end of 2018, Wing Cheung de la Torre filed for divorce. They agreed to share decision-making regarding their sons as well as time with them. She said in an email to the Globe that the marriage “ended very amicably,” that Ralph is “a wonderful father,” and that she considers him among her best friends. He has since remarried, to Nicole Acosta, who describes herself on LinkedIn as a real estate representative educated in Costa Rica. She once worked at the marina where de la Torre competed in the fishing tournament.
In his recent email exchanges with the Globe, de la Torre offered a spirited defense of his tenure at Steward. He said he understands the broadsides he has received over his wealth, considering the state of his company, but points out, credibly, that the original Caritas hospital chain would not have survived without aggressive action and that the path he steered in 2010 was the only viable option.
“We have kept these hospitals open despite disparities in reimbursement rates, and a significantly lower percentage of commercial payers than other hospitals in Massachusetts, and an expanding Medicaid population,” he said. “As a taxable entity, these headwinds are particularly difficult.”
De la Torre said he personally backed a $200 million loan to stabilize the hospitals during the COVID pandemic — a loan guarantee for which he says he is still on the hook. MPT, the hospital real estate company, loaned the money to Steward International in 2020, which then passed the money onto Steward Health Care in the US in exchange for the international rights. De la Torre said he pledged all of his equity in Steward and other assets to guarantee the loan.
In January of 2021, Steward paid the roughly $111 million dividend to the company’s equity holders, “with the majority of these funds ultimately transferred to de la Torre personally,” a February federal lawsuit filed in Texas by Aya Healthcare Inc. alleged. The San Diego staffing company provided nurses to Steward hospitals during the pandemic.
At the time of the dividend payment, Steward owed Aya more than $7 million for nurses Aya had provided, the company said. That debt would eventually grow to about $40 million, the lawsuit states.
The suit alleges that de la Torre used the dividend to support a “lavish lifestyle” and that he, as CEO and member of the board, had authorized the dividend payment despite Steward’s unpaid bills, in order to “hinder, defraud or delay creditors by taking cash needed to pay Steward’s debts and funneling it to himself and MPT.”
The first COVID wave had largely subsided by January 2021, when the dividend was paid, de la Torre said, and the portion he received “helped to partially offset my personal risk of backing the $200 million loan” from 2020. He declined to say how much of the dividend he received.
De la Torre also said that Steward represented only a fraction of his personal earnings and that approximately 75 percent of his gross income last year came from outside Steward. “This includes significant investments made prior to and/or separate from Steward that provide additional income,” he said by email.
He is currently engaged in helping Massachusetts officials parcel out pieces of his falling hospital empire to other operators. He is hoping to provide “an orderly transition.”
It is a tremendous fall for the one-time prophet of the community hospital.
“It’s sort of a classic story,” said David Torchiana, a former cardiac surgeon who was de la Torre’s mentor, “of a driven person who was gradually blinded by his own hubris.”
Globe correspondent Laura Beil contributed reporting from Dallas.
Mark Arsenault can be reached at [email protected]. Follow him @bostonglobemark. Liz Kowalczyk can be reached at [email protected]. Robert Weisman can be reached at [email protected]. Adam Piore can be reached at [email protected].
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