The Rockledge Regional Medical Center reeks of raw sewage and bat guano. No one knew that bat shit was called “guano,” or that the pungent smell emanating from the fifth-floor intensive care unit had bat guano as a source, until last spring, when a delirious patient complained he was being attacked by a “giant grasshopper,” which turned out to be a bat, which turned out to be one of what four nurses told the Prospect was estimated to be at least five thousand more.
The exterminators alleged in court that Steward Health, Rockledge’s corporate owner, never paid them the $936,320 they were owed for “evicting” the bats from the hospital, which sits roughly eight miles southwest of the Cape Canaveral Space Force Station. And so when, a week or two before Christmas, the sinks on the second floor began backing up with thick, black gunk that smelled like feces of the human sort, the hospital’s in-house maintenance staff tried to handle the job themselves.
For a few frenzied days, they snaked the drain trying to find the clog, at which point they realized that one of the pipes was leaking sewage from what seemed to be a massive hole. “There was literally poop everywhere: on the walls, on the floor, I know it was on the equipment,” says a nurse, who snapped some photos of the storage room where the maintenance crew had attempted to fix the building’s aging pipes. One photo of a sink partially filled with the mysterious black liquid showed up on the “Rockledge, Florida Community Updates & News” Facebook group, posted by the granddaughter of a stroke victim who had been admitted to the ICU. Somehow the photo disappeared, and Poopageddon never made it onto the local TV news, the way the bat infestation had.
Rockledge is just one of 32 hospitals operated by Steward Health, which the Democratic mayor of Haverhill, Massachusetts, recently described by saying, “I think we are, perhaps, the victims of a Ponzi scheme.” Nurses say the hospital is chronically out of heart valves, urology lasers, Impella catheters, cardiac catheterization balloons, slings for lifting heavier patients, blood and urine test reagents, and most recently, prescription paper. Medical equipment used in lifesaving treatment has been repossessed, as have Pepsi machines and even, according to one account from an alleged longtime employee posted on Reddit, a quantity of Boar’s Head deli meats. And Steward has been sued by dozens of vendors and service providers, from landscaping services to revenue cycle managers to a long list of physician and nurse staffing agencies, for failing to pay its bills.
Even the bills Steward does manage to pay often involve weirdness. The Rockledge cardiothoracic unit recently got a couple of weeks’ worth of supplies delivered after Steward paid off a vendor using five separate $1 million checks. Just over a year ago, the whole nursing staff’s paychecks came from a random hospital in Utah. Until last year, Steward owned five hospitals in Utah; last month, two former minority owners sued the hospital chain for allegedly “sweeping” out more than $18 million, using it on unrelated expenses, and leaving the hospitals with a pile of unpaid bills. A lawsuit filed in December by a large physician staffing agency to which Steward allegedly owes $1.66 million claims Steward executives repeatedly lied about having already transmitted payments owed to the company’s doctors, at one point in August even furnishing photos of two fake checks to “prove” the payments were on their way, 22 days before any promised funds materialized. (Eventually, a check showed up, for less than half the amount Steward said it had paid, which was in turn a fraction of the amount it allegedly owed.)
“The hospital only spends 28 to 29 percent of its revenue on labor, and they don’t seem to have paid anyone else in nearly a year,” said a longtime nurse, one of six current or recently departed Rockledge employees who approached the Prospect to call attention to the hospital’s plight, most of whom did not want to be named because Steward had retaliated against whistleblowers in the past. “So I just don’t understand where the money is going.”
Last Friday, an editor at the leveraged finance news agency 9fin reported on X that Steward would be filing for bankruptcy protection any day now. But a Florida health care executive who says Steward owes his companies roughly $400,000 told the Prospect that executives had told him that the internal deadline for filing for a Chapter 11 reorganization had come and gone last June, and the company is now doing all it can to stave off a Chapter 7 liquidation, which would put a neutral court-appointed trustee in charge of selling off Steward’s assets and expose its executives and enablers to major clawbacks and liabilities. (Just days ago, a nurse staffing firm sued both Steward founder-CEO Ralph de la Torre and its landlord and de facto parent company Medical Properties Trust [MPT] for fraud and unjust enrichment over a monster dividend they paid themselves in early 2021, at which point the company was allegedly $1.4 billion underwater and owed the staffing agency $40 million; de la Torre now famously used the dividend to buy himself a $40 million mega-yacht.)
In lieu of an orderly wind-down of its hospitals, Steward seems to be taking a kind of “Irish goodbye” approach. It shut down one Beaumont, Texas, hospital earlier this month on just a few days’ notice; in West Monroe, Louisiana, the county hired a consultant this week to mount a last-ditch effort to find a buyer for Steward’s Glenwood Regional Medical Center, which state Rep. Michael Echols told the Prospect will likely otherwise shut down within the next month as a result of what he called a “Ponzi-like scheme.”
Nurses provided the Prospect with photos documenting maintenance problems at the Rockledge Regional Medical Center:
In Massachusetts, where Steward was founded and owns nine hospitals, the company’s representatives have essentially ghosted the political class it wooed so effectively a decade ago, when de la Torre graced the cover of the Boston Globe Magazine and touted himself as the quintessential Obamacare success story. Over the past few weeks, Massachusetts politicians have railed against Steward, de la Torre, and his yachts, and Gov. Maura Healey last week instructed the company to leave the state “as soon as possible.”
Steward representatives have been conspicuously absent from all the proceedings and media coverage, with the exception of a letter to Healey an executive published on a site called CommonWealth Beacon touting the “613 megabytes” of data and documents the hospital chain had supplied to the state attorney general. Finally on Friday, following a wry Globe column about all the luxurious destinations a Steward-owned Bombardier had visited over the past two years -- Corfu, Santorini, St. Maarten and Antigua among them -- Steward issued a press release announcing a plan to sell “non-essential assets, including Steward-owned aviation” in hopes of “improving the system’s liquidity position.”
In Florida, by contrast, where Steward owns another eight hospitals, neither the company’s financial precarity nor de la Torre’s yachts and planes have made headlines. One of the Florida health care executives, who did not want his name to be used because he believes Steward has “powerful allies,” said he believes Steward’s executives are trying to reconstitute the company into a Florida-focused system. “That’s why you don’t see anything about this on the news.” A spokesman for Rep. Bill Posey, the hospital’s congressman and a Rockledge resident, confirmed that his staff had been “monitoring” the situation at the hospital “for some time,” but suggested its fiscal woes were outside Steward’s control. Florida Attorney General Ashley Moody did not respond to an email or a message left at her office; nor did state Rep. Thad Altman, in whose district the Rockledge hospital and its sister hospital in Melbourne are located.
Perhaps most noteworthy, Randy Fine, the powerful chair of the state legislature’s Health and Human Services Committee who represents a district a literal stone’s throw from Steward’s Melbourne hospital, also failed to return an email and phone messages from the Prospect, though the former casino executive has been driving the region’s hospital agenda for months over his aggressive campaign to privatize Brevard County’s last community-owned hospital, a proposal that could easily condemn yet another health care institution to Rockledge’s ghastly fate—and the stated reason one 25-year nursing veteran contacted the Prospect to blow the whistle on conditions at the hospital.
“It seems like these conversations always start with what a ‘burden’ a public hospital is on its community and how much tax revenue it would bring in if it were just sold off to a for-profit,” the nurse said. “But what about the burden a for-profit hospital places on its community? What about the fact that they literally owe tens of thousands of dollars to half the small businesses in town?”
“I should probably keep my mouth shut but I’m just out of fucks to give,” said another Rockledge nurse who has worked at the hospital for 15 years. That nurse, one of two who told the Prospect they had sustained injuries lifting patients without the help of specialized equipment Steward has failed to keep stocked with disposable slings, choked up relating a story about recently being forced to discharge a diabetic homeless patient in his early thirties without shoes or insulin. “I don’t want to act like everything was so rosy back when the good old boys ran this place, but the good old boys had to shop at Publix with the rest of the community, and they would never tell the nursing staff to kick out someone like that without shoes on his feet or insulin in his pocket.”
A longtime nurse named Vonnay Norbury, who retired from the hospital around the time of the bat crisis, told the Prospect she had contacted every state agency she could think of, most recently the office of Florida Gov. Ron DeSantis, about the poop crisis and other catastrophes. As of yet, she’s gotten nowhere. “I am hoping you will not be like everyone else we have reached out to,” she wrote me in a January Facebook message.
UNTIL 2010, ROCKLEDGE BELONGED TO A FLEDGLING two-hospital nonprofit called the Wuesthoff Health System, which was run by a volunteer board of directors drawn from the usual mix of physicians and county boosters and helmed since 1999 by a former Tenet executive named Emil Miller. In 2008, as the foreclosure crisis decimated the Florida economy, the board hired a consultancy called Kaufman Hall, now majority owned by the private equity firm Madison Dearborn Partners, to put the hospital up for sale.
Two years later, Wuesthoff sold to Health Management Associates, a Florida-based hospital chain that would soon be in hot water with the feds over a number of illegal kickback and fraud schemes some employees alleged it used to juice Medicare reimbursements. The $145 million transaction earned Miller and his C-suite a controversial $10.6 million golden parachute, effectively ended the antitrust litigation, and endowed a nonprofit public-health organization called the Space Coast Health Foundation, helmed by the former Wuesthoff communications director. Boosters promised that the transaction would generate more than a million dollars in annual tax revenue for the school district and other public works, and that the Space Coast Health Foundation would fund desperately needed “preventative care” initiatives throughout the county.
Instead, as often happens, the hospitals were passed around from one corporate owner to the next: to Community Health Systems in 2014, then in early 2017 to Steward, which was itself preparing for an ownership change as its private equity owner Cerberus planned its exit. Notably, Steward didn’t actually buy the Rockledge hospital with its own money; Medical Properties Trust, which had just purchased Steward’s real estate portfolio from Cerberus for $1.25 billion, financed the purchase of CHS’s three Florida hospitals and five others in Ohio and Pennsylvania, and contracted Steward to operate the hospitals in exchange for regular rent payments to MPT, though the partnership between the two was far stranger than a conventional landlord-tenant relationship.
Steward has been sued by dozens of vendors and service providers, from landscaping services to revenue cycle managers to a long list of physician and nurse staffing agencies, for failing to pay its bills.
In Steward’s early days, de la Torre told investors the company would disrupt health care by promoting a new business model that would “integrate” patients’ medical needs under one roof (and according to lawsuits and federal regulations, evade certain federal laws banning physician kickbacks and self-referrals). But by the time Steward bought Rockledge, a former administrator says, integrating networks was no longer a priority. The company immediately sold the hospital’s brand-new hospice center and home health care business and began shutting down or outsourcing the management of other departments to service providers. “It was pretty clear they were just there to move money around,” the former administrator, who left Steward less than a year ago, told the Prospect.
Not long after Steward took over the Space Coast hospitals, it earned a reputation as a deadbeat, according to a lengthy 2019 Vero Beach News investigation into the company’s penchant for not paying its bills. And Rockledge began falling into serious disrepair. The 15-person in-house maintenance team Wuesthoff had employed under nonprofit ownership shriveled to two or three full-time staffers, according to the nurses, while the company prohibited individual or even regional executives from contracting or hiring anyone to fix anything but the most minor problems. An internal document dated September 2020 specifies that hospital CEOs were authorized to make “financial commitments” only up to a threshold of $500,000—a pretty bonkers maximum in an industry in which a single patient’s monthly drugs alone can cost well over six figures—and a spreadsheet from around the same time suggests that only a handful of executives at Steward headquarters were authorized to make commitments in excess of $1 million.
Nurses provided the Prospect with dozens of photos and videos documenting maintenance problems at the hospital: water leaking out into the parking lot from one of the maintenance rooms, a giant oxygen tank sitting in the loading dock one nurse worries is “one drunk driver away from blowing the back wing of the hospital away,” the fourth floor “graveyard of broken beds” with unfulfilled work orders dating back to September, and sink after sink filled with black gunk, sealed off with “DO NOT USE” signs and months-old work orders. On the paper covering one of the sinks alleged on the work order to have a “terrible smell,” an employee had scrawled, “Fix me NOW!” and two others had playfully responded, “I’ve only been broke 2+ months! What’s the hurry?” and “NOT BEYOND STATUTE OF LIMITATIONS YET!”
Five of the building’s nine elevators have been nonoperational for the better part of the year, and only one or two of the working ones can properly accommodate a critical care patient. Paradoxically, this was an even bigger safety issue back before the bats were discovered, when patients who experienced complications during heart surgery needed to be shuttled up three stories to the ICU; now they can be raced down the hall to the relocated ICU, where half the sinks still have “Do Not Use” signs hanging over them.
A sign dated December 21, 2023, about the project to repair the blocked sinks and piping lists a permit expiration date of February 29, but it’s been weeks since anyone worked on the job, the nurses say. “I was told the contractor isn’t coming back until paid,” one nurse texted about the current status of the problem.
YOU MIGHT THINK THAT A HOSPITAL AS DECREPIT as Rockledge would capture the attention of either state or federal regulators. But where Steward excels, former employees of its corporate emergency maintenance team say, is in preparing Steward hospitals for inspections from the Joint Commission on Accreditation of Healthcare Organizations, a para-governmental entity that has conducted routine hospital evaluations and inspections since the 1940s and submits its findings to the Centers for Medicare & Medicaid Services; and the Leapfrog Group, a nonprofit founded in 2000 by Harvard public-health professor Lucian Leape that assigns letter grades evaluating “safety” to hospitals and surgery centers across the country.
In November, just weeks before the sewage began leaking into the walls and backing up the sinks, Rockledge got an “A” rating from Leapfrog, much to the shock of staffers. During the weeks before the inspection, hospital administration had made a few noticeable changes: replacing discolored and damaged ceiling tiles, leasing a fleet of special rotating hospital beds designed to help elderly patients avoid developing bedsores, and finally hiring a pair of intensive care specialist physicians to supervise the ICU, which had been largely run by nurses and surgeons. Still, staffers told the Prospect that it was difficult to believe such last-minute adjustments could get Rockledge an “A.”
“They had a little party to celebrate getting an ‘A’ from Leapfrog where they handed out these stickers of achievement, but almost no one took any of them,” said a fourth longtime hospital employee, with a laugh. A nurse snapped a photo of the “A” badge on the window of the hospital’s forlorn cafeteria, which she reported “smells like a sewer.”
But after the hospital passed inspection, nurses told the Prospect that the fancy bedsore-avoidance beds were whisked away, an enormous blow in a hospital with such a chronic shortage of usable beds that one operating room clinician said maintenance had taken to returning broken beds to the wards reset to their firmest setting, as though they had been fixed. “I watched a bed collapse underneath a [patient] who had just undergone hip surgery,” the clinician said with an audible shudder. “It was just unreal.”
It wasn’t the first time a Steward hospital’s Leapfrog rating caused a stir. In 2012, a man named Brian Evans sued Steward, Cerberus, de la Torre, Leapfrog, and a host of other entities after his mother died at Holy Family Hospital, a facility in which she chose to undergo elective knee surgery on account of its “A” grade from Leapfrog. In 2018, on the other hand, Rockledge’s nearby sister facility Sebastian River Medical Center was one of just two hospitals in Florida to receive an “F” from Leapfrog, though it managed to snag an “A” the next year, then dropped to a “D” in 2020.
“They’re not getting these grades because the building is in great shape,” a former corporate employee said of Rockledge’s “A.” “They’re getting them because the compliance side is out there, checking the medications, fixing the ceiling tiles, auditing safety protocols. They know exactly what inspectors are looking for when they do these surveys and how to get it in order.” In a statement, Leapfrog’s vice president of health care ratings defended its methodology and said the “data used to calculate Hospital Safety Grades is transparently available on our public reporting website.”
There was supposed to be a big meeting to address the hospital’s future earlier this week, but the meeting was quietly canceled, and the director of nursing has been out of town since the beginning of the month. And last Wednesday, MPT promised Wall Street analysts in a conference call that, following a $772 million write-off for the previous quarter and the supposedly imminent finalization of another bridge loan, Steward’s finances would be somehow restored to fiscal health by June.
A Bank of America analyst was audibly incredulous. “What gives you the confidence Steward will be able to ramp up and start paying full rent starting in June?”
“We own hospitals no one wants to see closed,” the REIT’s longtime chief financial officer replied, assuring listeners that MPT was as always working aggressively with Steward to “re-tenant” and sell the hospital chain’s assets. But weren’t all the problems spooking potential buyers? the analyst pressed. “Are there concerns of fraudulent conveyance?” The executive responded as though he’d never considered the question. “I wouldn’t know how to answer that.”
A week earlier, an ICU nurse who has worked in the hospital for 15 years says she saw a group of what appeared to be law enforcement officials wearing “thick badges” around their necks roaming the halls; she was later told they’d been there to inform the hospital that the state would be fining Rockledge $3,000 per day until it got the elevators running again. “It’s funny because I told ’em, oh do we owe y’all money too?” the nurse said. “Get in line.”
