- A Wisconsin senator is accusing nonprofit system Ascension of “operating like a private equity fund” for aggressively pursuing investment opportunities while staffing and services falter at its hospitals, according to a Monday letter to Ascension CEO Joe Impicciche.
- The letter, sent by Sen. Tammy Baldwin, D-Wis., comes after reports in the Milwaukee Journal Sentinel and Milwaukee Magazine alleging the system recently experienced disruptions to patient care, long wait times, surgery delays and staff concerns about safety at one hospital, and after it announced plans to close a labor and delivery unit at another facility.
- Baldwin wrote that the St. Louis-based system has for-profit investment activities dwarfing what it provides in annual charity care as a nonprofit, tax-exempt organization.
Ascension has been the subject of several recent reporting investigations, including a December New York Times article alleging it spent years making its workforce leaner to boost profitability — leading ultimately to its detriment when the pandemic hit.
In the letter, Baldwin asked for the system to answer a list of questions regarding its investment and operating activities, alleging it “appears to be evaluating each staffing decision, service line, and hospital location as solely a business decision while seeking to bolster cash to put towards its investment funds.”
She highlighted the closure of Ascension’s Providence Hospital in Washington D.C. in 2018, which sparked criticism and led to an investigation from the D.C. attorney general, finding the system charged its own hospital fees that were “likely excessive.”
Ascension charged the hospital for services provided by its subsidiaries and companies within its private equity portfolio amounting to $27.5 million in fiscal year 2017, while Providence Hospital posted a loss of $32.8 million, according to the letter.
Baldwin also mentioned an investigation in STAT news analyzing Ascension’s private equity operations, finding many investments did not align the nonprofit’s mission of providing charitable benefits to the community.
For example, in 2015 the system entered a 10-year partnership with a debt collection company that had to cease operations in Minnesota following a state investigation that found it embedded debt collectors among hospital staff and assigned patient scores based on their ability to pay, according to the letter.
The partnership is still ongoing and particularly unusual given that nonprofit health systems are held to strict standards that bar aggressive billing and debt collection practices, she wrote.
Ascension CFO Elizabeth Foshage highlighted the system’s $18 billion of cash and investments this year at the JPMorgan Healthcare Conference, raising questions about why the system is not focusing on reinvesting in its operations, particularly in its workforce, as hospitals across the country face ongoing, pandemic-driven staffing shortages, she wrote.
At the same time, the system's investment funds lost it nearly $750 million in the most recent quarter — roughly $200 million more than it provided in charity care over the same period, Baldwin wrote.
“Such an investment return — even if it is uncharacteristic of the fund’s longer-term performance—raises serious questions about how Ascension Capital tangibly subsidizes the health system’s charity care,” she wrote.
“It also suggests that a less volatile, more conservative investment approach might be more appropriately suited to the system’s mission,” she wrote
Ascension said it looks forward to continuing to work with the senator on ways to serve its community, according to an emailed statement.