Non-profit Ascension CEO Pressed to Detail For-profit Investments, Community Benefit

Wisconsin Sen. Tammy Baldwin wants answers on Ascension's private equity investments, executive pay, charity care, staff shortages and 'conflicting priorities'.

U.S. Sen. Tammy Baldwin (D-WI) wants Ascension CEO Joseph Impicciche to detail "Ascension's questionable priorities that appear to go against its non-profit mission."

"As a nonprofit, tax-exempt, health system, Ascension is required to provide charitable benefits to the community and operate solely to serve a public, rather than a private interest," Baldwin writes in her letter this month.

"Despite these requirements, Ascension has significant for-profit investment activities that dwarf what the system provides in annual charity care."

Baldwin cited reports in the Milwaukee Journal Sentinel and Milwaukee Magazine highlighting "disruptions to patient care, long wait times in the emergency department, delayed surgeries and staff concerns about patient safety" at Ascension Columbia St. Mary's, and the closure of a labor and delivery unit on Milwaukee's south side at Ascension St. Francis.

Baldwin notes that Ascension CFO Elizabeth Foshage boasted at this year's J.P. Morgan Healthcare Conference that Ascension held $18 billion in cash and investments.

"According to Ascension, these investments are 'generating capital gains that can be re-invested to support Ascension's Mission to care for those who are poor and vulnerable,' yet there is no indication that the proceeds of Ascension's investment funds are being reinvested in Ascension's Wisconsin hospitals," Baldwin writes.

"In fact, I am concerned that the opposite is occurring—that by operating like a private equity fund, Ascension is squeezing staff, closing facilities, and extracting cash from its member hospitals for dubious 'management fees' all to advance its investment activities and provide compensation to its executives."

Baldwin also raises questions about Ascension Capital, which the health system calls a "strategic investment initiative, generating capital gains that can be re-invested to support Ascension's Mission to care for those who are poor and vulnerable."

Baldwin notes that recent financial statements show that Ascension's investment funds have lost the system nearly $750 million in the most recent financial quarter.

"These losses are roughly $200 million more than the amount that Ascension provided toward charity care over that same span," Baldwin writes. "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. It also suggests that a less volatile, more conservative investment approach might be more appropriately suited to the system's mission."

Ascension issued this statement: "Ascension and its physicians, nurses and caregivers are proud of our mission to provide care for those most vulnerable – especially during the past three years of the COVID pandemic – and we look forward to continuing to work with Senator Baldwin on ways to serve the community."

8 Questions

Baldwin wants Impicciche to provide:

1. A list of investments by all investment funds operating at Ascension, and additional information on Ascension's investment returns as a percentage of its revenue from fiscal years 2015 through 2022.

2. All re-investments made by Ascension Capital into charity care services from fiscal years 2015 through 2022 by location.

3. An explanation of Ascension's relationship with R1 RCM, including a description of R1 RCM's current contracted activities and associated revenue from fiscal years 2017 through 2022. How does R1 RCM assist in Ascension's debt collection practices and are any Wisconsin facilities currently using R1 RCM's services?

4. A description of all management fees, including direct costs retained by the health system, charged to Ascension Columbia St. Mary's and Ascension St. Francis, including the contract between the ministry and the hospitals.

5. A detailed description of how $66 million in Provider Relief Funds was used to address staffing concerns at Ascension Columbia St. Mary and Ascension St. Francis.  

6. The community health needs assessments required by the Affordable Care Act completed by Ascension for all its care venues in Wisconsin.

7. A detailed description of approximately $256 million in reported community benefits funded by the health system in the past three months.

8. A description of the compensation packages, including all equity, stock options, restricted stock units, or performance-related metrics for Ascension executives, and provide detailed compensation descriptions for any board activity attributed to roles on Ascension affiliated organizations for Anthony Speranzo, CEO of Ascension Capital and Anthony Tersigni, Chairman of the Board, Ascension Capital.