By Rachel Cohrs
- “The nation’s largest Catholic hospital system, a sprawling behemoth of more than 140 hospitals called Ascension, is quietly building an unprecedented and strikingly unusual $1 billion private equity operation, using its wealth to invest like a Wall Street firm, a STAT investigation has found. Rather than passively investing in private equity funds, the practice of several major nonprofit hospitals, Ascension has over the past six years actively made investment decisions to play the private equity game itself, for profit.”
- “STAT constructed a portrait of Ascension’s unconventional private equity investment activities 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. 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 the nation’s poorest and most vulnerable patients.”
- “In pursuing this investment strategy, Ascension, which is based in St. Louis, Mo., has partnered with a firm called TowerBrook Capital Partners and invested in several health care companies, among them at least one whose history, at least before Ascension tossed it a lifeline, seemed at odds with the values of a traditional Catholic health system. That firm, a beleaguered medical debt collection company, faced a lawsuit over aggressive debt collection tactics that included pressuring patients to pay bills while they were, in some cases, still in the emergency room.”
- “…even with extra income from its overall investment portfolio, Ascension chose to pursue cuts to safety-net hospitals that prompted harsh criticism from community leaders. Soon after it began pursuing formalized private equity work in 2015, Ascension started gutting services at a hospital in Washington, D.C., that served low-income patients. Ascension shuttered the hospital’s maternity ward, then all hospital services including its emergency room and intensive care unit. The same year, it pursued similar cuts at a hospital in Milwaukee. ‘For Ascension to now turn around and say, ‘We are going to chase money down and profiteer in the health care space so we can give the money away to people,’ I don’t believe that,’ said Roderic Woodson, a former member of the D.C. hospital’s board.”
- “For the first joint investment of its private equity partnership, announced in 2015, Ascension chose a struggling and embattled debt collection company, Accretive Health. When Ascension and TowerBrook Capital Partners threw a $200 million lifeline to the debt collection firm, its tactics were already the subject of litigation.”
- “Three years earlier, Accretive faced a scathing investigation from the Minnesota attorney general into the aggressive, allegedly illegal ways it sought to get patients to pay their medical bills. One woman said she was forced to pay $500 before she could return to the bedside of her daughter, who had just tried to overdose. In another case, a woman said she was asked to pay bills in the emergency room, in the midst of being treated for a miscarriage. Other patients said they had been asked to pay on gurneys, or hooked up to tubes or morphine. The $2.5 million settlement in 2012 saw the company banished from the state for two years. ‘If you want to imagine an activity at the opposite end of something charitable, you might as well focus on a company that makes money by squeezing blood from a stone,’ Boston University professor [Alan] Sager said.”
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