Tammy Baldwin presses Ascension for details on private investments after media reports

A key senator is probing Ascension Health for answers on its investment operations after media reports of disruptions to care, the latest scrutiny of private investment's role in healthcare.

Sen. Tammy Baldwin, D-Wisconsin, wrote a letter Monday to the leadership of the nonprofit hospital system asking for detailed information on its finances, including how the activities of its private investment funds coincide with the nonprofit’s structure. 

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

Baldwin was concerned about media reports in the Milwaukee Journal Sentinel and Milwaukee Magazine focusing on long wait times and other care disruptions at Ascension Columbia St. Mary’s in the city. She was also concerned about Ascension’s decision to get rid of a labor and delivery unit at another hospital in the city. 

She noted that while the hospital chain’s investments are intended to invest back into the facilities, hospitals in Wisconsin haven’t seen the benefit. 

“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 wrote. 

Baldwin asked the system to answer a series of questions, including divulging any charity care investments made from 2015 through 2022. The senator is also asking for a list of investments undertaken by Ascension and other financial details such as executive pay. 

Ascension told Fierce Healthcare that the system 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 Sen. Baldwin on ways to serve the community."

Ascension operates 33 facilities in Wisconsin and has more than $18 billion in cash and investments. 

Baldwin’s letter comes amid increased scrutiny from lawmakers over the role of private equity in healthcare, with some worried about its impact on care. The Federal Trade Commission and the Justice Department are paying closer attention to private equity deals in healthcare.

Several progressive lawmakers have criticized the new ACO REACH payment model, highlighting issues with private equity stakes in doctor groups participating in the model. The Biden administration sought to ease such concerns by requiring physicians to make up a 75% majority of a participant’s governing board. 

The Centers for Medicare & Medicaid Services has also worked to increase transparency about private equity’s role in nursing home ownership. Monday, the agency released a proposed rule that would mandate homes disclose additional ownership and management information to shed light on the role of private equity in nursing homes. It cited a recent study that found residents in nursing homes owned by private equity were 11.1% more likely to have a preventable emergency department visit.