WASHINGTON — America’s largest Catholic healthcare facility program, Ascension, has quietly created out a strikingly abnormal non-public fairness operation truly worth more than $1 billion, a STAT investigation has discovered.

The investigation reveals how much a wealthy, religious, tax-exempt well being technique can migrate toward behaving like a Wall Avenue agency — and how very little this kind of a program has to disclose about regardless of whether or how its income are benefiting individuals.

Ascension, a extra than 140-medical center behemoth based mostly in St. Louis, Mo., has utilised its prosperity to make a advanced expense strategy which include a partnership with a personal fairness firm identified as TowerBrook Funds Associates. While quite a few other nonprofit hospitals have dabbled in private equity investing, Ascension’s technique is more formalized and far more expansive than what others have pursued so significantly. Ascension and TowerBrook started investing jointly in late 2015.


“That is rather an intense and controversial system, and it is not obvious how those investment incomes or returns are aligned with Ascension’s charitable mission,” stated Ge Bai, a Johns Hopkins University professor of accounting and wellbeing coverage.

Their 1st joint investment decision poured $200 million into an embattled debt assortment and billing enterprise. Prior to the Ascension and TowerBrook financial investment, the company had been accused of illegally trying to accumulate dollars from clients, which includes when they had been still in the unexpected emergency home. Ascension signed a extensive-phrase agreement with the corporation, as well, which buoyed the company’s funds.


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

STAT’s investigation, released Tuesday, is based mostly on interviews with practically two dozen educational authorities, fiscal analysts, accountants, and local community organizers and a evaluation of additional than 3,500 webpages of monetary disclosures, lawsuits, and formerly undisclosed inner economic paperwork.

Two distinguished Ascension executives had a considerable job in advancing Ascension’s private fairness tactic, and in 2019 still left their careers leading the hospital process for interior roles overseeing Ascension’s investments in its place. The two created noticeably additional cash in their new financial administration roles in 2019 than they did as top rated executives — they even produced much more than the current CEO of the clinic technique, according to tax filings.

Ascension states the aim of its expenditure technique is to fund its charity do the job, precisely “generating money gains that can be re-invested to guidance Ascension’s Mission to care for people who are inadequate and vulnerable,” in accordance to its site.

But while Ascension’s general expense money has substantially amplified given that 2015, the stage of care the medical center offers for totally free to needy people has stayed about the same, about the typical for nonprofit health units. It is challenging to keep track of how much of that money could be directed to packages to support needy people, as it feeds into Ascension’s common harmony sheet.

And even with excess earnings from its investments, Ascension chose to pursue cuts to at least two protection-web hospitals in Washington, and Milwaukee, Wis., beginning in 2017 and 2018, respectively. The two endeavours prompted harsh criticism from community leaders.

“For Ascension to say, ‘We are going to chase money down and profiteer to give the revenue away to people,’ I never imagine that,” claimed Roderic Woodson, a previous member of the D.C. hospital’s board.

STAT attained out to Ascension with additional than 40 queries for this story. Spokesman Gene Ford declined to remark.