Wealthy Hospitals Grab Pandemic Payouts
Ascension Health and 19 other health care giants grab $5 billion in federal funds while smaller hospitals get little.
Ascension Health, the St. Louis based health care chain which runs a dozen hospitals in metro Milwaukee, was one of 20 wealthy health care chains that received more than $5 billion in federal grants even while they were sitting on more than $100 billion in cash, as the New York Times reported. “The Department of Health and Human Services has disbursed $72 billion in grants since April to hospitals and other health care providers through the bailout program,” but “smaller, poorer hospitals are receiving tiny amounts of federal aid.”
Ascension got $211 million in federal funding. While it operates as a tax-exempt non-profit, Ascension has $15.5 billion in cash on hand and “operates a venture capital fund and an investment advisory firm that helps other companies manage their money,” the story notes.
It also pays huge salaries to its executives as Urban Milwaukee has reported. Its most recent federal tax form, for 2018, shows that its top paid executive Anthony Tersigni, got $13.25 million in total compensation, while five other executives were paid a total of $33,5 million.
Jamie Lucas, Executive Director of the Wisconsin Federation of Nurses and Health Professionals, criticized the federal payout in a comment for Urban Milwaukee. “Ascension sits on billions of dollars yet functions as a not-for-profit,” he charged. “Who is really benefitting when a corporation with that much money is making nurses reuse masks and gowns? Should a corporation with billions of dollars be refusing nurses hazard pay on the frontlines of a global health crisis? This is allowed to happen because there’s almost no accountability in how these corporations provide healthcare.”
An analysis of federal bailouts to hospitals by Axios shows that Advocate Aurora got a $148 million federal CARES bailout payment and $701 million loan, while Froedtert got at $61 million grant and $172 million loan. There has been discussion of ultimately turning the federal loans into grants.
Advocate Aurora is the result of a 2018 merger of Aurora Health Care, the largest health care system in Wisconsin and Advocate Health Care, the largest such system in Illinois. It created the ninth largest such system in America, with a combined budget of $11.6 billion, and more than 500 facilities, including 27 hospitals. Its two CEOs earned $11.4 million and $11.7 million prior to the merger, which was about 755 times the average minimum wage worker for Aurora, as Urban Milwaukee has reported.
Ascension has threatened to close St. Joseph’s hospital in Milwaukee because it was losing $20 million a year at a time when the organization was earning $1.9 billion in net income (or profit) and had $5.6 billion in reserves, as Urban Milwaukee has reported.
Lobbyists for big health care groups “reached out to” top federal Health and Human Services officials to discuss how the CARES act money “would be distributed,” the Times reports. The department then devised formulas to quickly dispense aid which “favored large, wealthy institutions. One formula based allotments on how much money a hospital collected from Medicare last year. Another was based on a hospital’s revenue.”
“Hospitals that serve a greater proportion of wealthier, privately insured patients got twice as much relief as those focused on low-income patients with Medicaid or no coverage at all, according to a study this month by the Kaiser Family Foundation,” the story noted.
“A huge chunk of those emergency funds likely won’t go to lifesaving care or equipment,” a story in Time noted, “but to underwriting the astronomical administrative costs of negotiating a complicated network of private insurance providers and other bureaucratic functions.” The story noted a study which found that for hospitals, “the mean share of expenditures devoted to administrative costs in the U.S. was 26.6%.”
“Every cent of future relief money should come with standards that require safe staffing, hazard pay, adequate PPE, childcare, and covered medical treatments for all of their healthcare professionals – nurses, housekeepers, respiratory therapists, nursing assistants, and lab techs alike,” Lucas told Urban Milwaukee. “Clearly, Ascension has always had the resources to do better, and we deserve better, especially right now.”
Urban Milwaukee reached out to Ascension and has not heard back. Nick Ragone, a spokesman for Ascension, told the New York Times that the federal funds it received “facilitated our ability to serve our communities during this unprecedented time,” and that Ascension had not furloughed or laid off any workers and wouldn’t do so for “as long as possible.”
Update: After the story was published Aurora Advocate offered this statement to Urban Milwaukee: Since March, all of our team members have received their full pay, even if they were unable to work because elective procedures and surgeries were halted. At the same time, team members who serve in dedicated COVID-19 units, emergency departments and units that have a COVID-19 patient population of 50 percent or greater earn additional compensation. These special pay practices are in effect from the end of March through the end of May and will be evaluated monthly thereafter.
Additionally, our CEO began taking a 50 percent salary reduction in May for at least 12 weeks. That reduction will be evaluated on a monthly basis thereafter, as will the salary reductions of other senior leaders, including senior executives, system vice presidents and hospital presidents. The dollars saved will be redirected to the Team Member Crisis Fund, which provides assistance to team members experiencing an emergency that makes it difficult to cover basic needs for themselves or their family.
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