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WASHINGTON — America’s largest Catholic hospital system, Ascension, has quietly built out a strikingly unusual private equity operation worth more than $1 billion, a STAT investigation has found.

The investigation reveals how far a wealthy, religious, tax-exempt health system can migrate toward behaving like a Wall Street firm — and how little such a system has to disclose about whether or how its profits are benefiting patients.


Ascension, a more than 140-hospital behemoth based in St. Louis, Mo., has 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 dabbled in private equity investing, Ascension’s strategy is more formalized and more expansive than what others have pursued so far. Ascension and TowerBrook began investing jointly in late 2015.

“That is quite an aggressive and controversial strategy, and it is not clear how those investment incomes or returns are aligned with Ascension’s charitable mission,” said Ge Bai, a Johns Hopkins University professor of accounting and health policy.

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


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

STAT’s investigation, published 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 previously undisclosed internal financial documents.

Two prominent Ascension executives had a significant role in advancing Ascension’s private equity strategy, and in 2019 left their jobs leading the hospital system for internal roles overseeing Ascension’s investments instead. Both made significantly more money in their new financial management roles in 2019 than they did as top executives — they even made 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 charity work, specifically “generating capital gains that can be re-invested to support Ascension’s Mission to care for those who are poor and vulnerable,” according to its website.

But while Ascension’s overall investment income has substantially increased since 2015, the level of care the hospital provides for free to needy patients has stayed about the same, about the average for nonprofit health systems. It’s difficult to track how much of that income might be directed to programs to help needy patients, as it feeds into Ascension’s general balance sheet.

And even with extra income from its investments, Ascension chose to pursue cuts to at least two safety-net hospitals in Washington, and Milwaukee, Wis., starting in 2017 and 2018, respectively. Both efforts prompted harsh criticism from community leaders.

“For Ascension to say, ‘We are going to chase money down and profiteer to give the money away to people,’ I don’t believe that,” said Roderic Woodson, a former member of the D.C. hospital’s board.

STAT reached out to Ascension with more than 40 questions for this story. Spokesman Gene Ford declined to comment.

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