Ascension Health System operates private equity fund on Wall Street


WASHINGTON – America’s largest Catholic hospital system, Ascension, has quietly built a surprisingly unusual private equity deal worth over $ 1 billion, a STAT investigation has found.

The survey reveals how a wealthy, religious, and tax-exempt healthcare system can migrate to behavior similar to a Wall Street company – and how much such a system does not have to disclose if or how its benefits benefit patients.

Ascension, a giant of more than 140 hospitals based in St. Louis, Missouri, used its wealth to create a sophisticated investment strategy, including a partnership with a private equity firm called TowerBrook Capital Partners. While many other nonprofit hospitals have embarked on private equity investing, Ascension’s strategy is more formalized and broader than what others have pursued so far. Ascension and TowerBrook began to invest jointly at the end of 2015.


“It’s a pretty aggressive and controversial strategy, and it’s not clear how that income or investment returns align with Ascension’s charitable mission,” said Ge Bai, professor of accounting and health policy. at Johns Hopkins University.

Their first joint investment paid $ 200 million into a troubled debt collection and billing company. Prior to the investment in Ascension and TowerBrook, the company had been accused of illegally trying to collect money from patients, including while they were still in the emergency room. Ascension also signed a long-term contract with the company, which supported the company’s finances.


In April of this year, the minority shareholders of the company R1 RCM, filed a complaint accusing Ascension and TowerBrook of teaming up to extract $ 105 million years before they were supposed to.

STAT’s investigation, released Tuesday, is based on interviews with nearly two dozen academic experts, financial analysts, accountants and community organizers and a review of more than 3,500 pages of financial disclosures, lawsuits and documents previously undisclosed internal financial resources.

Two prominent Ascension executives have played an important role in advancing Ascension’s private equity strategy and, in 2019, stepped down from their positions as head of the hospital system to internal roles overseeing Ascension investments. in place. Both made a lot more money in their new financial management roles in 2019 than as senior executives – they even earned more than the current CEO of the hospital system, according to tax filings.

Ascension says the goal of its investment strategy is to fund its charitable work, specifically “to generate capital gains that can be reinvested to support Ascension’s mission of caring for the poor and vulnerable,” according to Ascension. to his website.

But while Ascension’s overall investment income has grown significantly since 2015, the level of care the hospital provides free of charge to patients in need has remained about the same, roughly on par for healthcare systems. health nonprofit. It is difficult to determine how much of this income could be spent on programs to help patients in need, as it feeds the overall balance sheet of Ascension.

And even with additional income from its investments, Ascension opted to continue cuts to at least two safety net hospitals in Washington and Milwaukee, Wisconsin, starting in 2017 and 2018, respectively. Both efforts drew strong criticism from community leaders.

“For Ascension to say, ‘We’re going to chase the money and make a profit to give it to people,’ I don’t believe it,” said Roderic Woodson, a former DC Hospital board member. .

STAT contacted Ascension with over 40 questions for this story. Spokesman Gene Ford declined to comment.


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