Nurses Warn: Wall Street Targeting Hospitals for Profits
Press Release Press Release, 12/19/11
December 19, 2011
Protest Outside Headquarters of Cerberus
New York City - Tuesday, Dec. 20 at 12:30 p.m.
Private Equity’s Steward Health unit called “predatory”; Patient care down; “The cupboards are bare” - Kathy Reardon, RN, Steward Norwood Hospital
New York City - Hundreds of nurses and their supporters from across the U.S. will converge outside the offices of Cerberus Capital Management, 299 Park Avenue, on Tuesday, Dec. 20, at 12:30 p.m., to protest the practices of the multi-billion dollar private equity firm’s health care unit, Steward Health Care System. Cerberus-Steward now operates 10 hospitals in Massachusetts, has partnered with a number of physician practices here, and is now entering the health insurance market as well. Cerberus-Steward has come under increasing criticism for cornering the market with predatory practices, undercutting patient care with its push for profits.
The nurses -- from Massachusetts, and joined by RNs from NY, DC, CA, Il, PA and NV -- are members of National Nurses United, the largest union and professional association of registered nurses in the U.S., with 170,000 members. Nurses, allies and Occupy Wall Street protesters will speak at the rally, which will also feature theater and a 10-foot, three-headed dog, “Cerberus,” the mythical canine at the Gates of Hell.
“As patient advocates on the frontlines, nurses are sounding the alarm about the entrance of cut-throat private equity firms, like Cerberus, into the health care marketplace,” said Karen Higgins, RN and co-president, National Nurses United. “It is a development that spells danger for patients and communities across the country.”
Cerberus owns an array of businesses, including the Freedom Group subsidiary – leading manufacturer of guns and ammunition. Last year it added the chain of hospitals to its portfolio.
Nurses who work at those hospitals say that Cerberus-Steward has failed to maintain quality patient care standards at the Massachusetts facilities in contravention of an agreement reached with the state and with its employees. The okay for the profit maker to take control of the non-profit facilities was tied to keeping patient care a top priority. The company makes daily threats to close services or entire hospitals in direct violation of its assurances to the state as a condition of entering the marketplace.
The nurses report a number of alarming changes since Cerberus-Steward took over. Staffing levels have been reduced, specialty units for the care of specific conditions have been eliminated , and patients are treated like products on an assembly line. Even the most basic supplies are not available when nurses need them; for example bread, crackers and juice (which nurses need to stabilize diabetic patients) are no longer available on the floors.
Some nurses who spoke out to protect their patients have been fired, in direct violation of federal labor law. To its RNs, Cerberus-Steward reneged on its contract, dropping the promised defined benefit pension plan—a benefit promised to keep RNs on the job. It is threatening to cut health benefits to some nurses, as well.
Earlier this month, Cerberus-Steward announced a partnership with Compass Medical, a group of 90 doctors. This fall, Steward bought into Whittier Independent Practice Association and its 150 MDs. A protest by community hospital groups to Massachusetts AG Martha Coakley said these purchases “violate the assurance by Steward … that such apparent predatory actions against community hospitals would not take place.”
There are concerns that MD practices in deals with Cerberus-Steward would refer their patients to those hospitals, excluding non-profits. In a November 23 letter to the AG, the Massachusetts Council of Community Hospitals wrote, “What tools will be used to measure market power and leverage?”
On December 12, Cerberus-Steward announced it will begin marketing a health insurance plan. Steward Community Choice limited network plan has coverage for most ailments steering patients to Steward hospitals and doctors.Back to Press Releases »