St. Louis-based Ascension is regaining financial footing and re-entering acquisition mode after a period marked by portfolio divestitures and strategic restructuring.
The nonprofit health system, which reported a $3 billion operating loss in fiscal year 2023, recently implemented several leadership and operational changes to steer toward financial sustainability. Among those was the appointment of Saurabh Tripathi as executive vice president and CFO in April 2024. Mr. Tripathi previously served as CFO and treasurer of Pittsburgh-based Highmark Health.
“When I joined Ascension, the organization was already in the midst of a transformation. I had the opportunity to jump in and learn what we were trying to achieve strategically,“ Mr. Tripathi said during an April 29 panel at the Becker’s Annual Meeting. “We looked across all our ministries and geographies to assess where we could best serve our patients — delivering care in the lowest-cost, highest-quality settings, where our physicians care for 6 million patients annually.”
In some markets, like Michigan, Ascension identified opportunities to partner with local systems. In Detroit, it entered a joint venture with Henry Ford Health, transitioning some facilities under Henry Ford’s management to better serve the region.
“That level of strategic thinking has evolved over the past 36 months, and now we’re seeing the fruits of that work,” Mr. Tripathi said. “I mentioned the $2.6 billion [net] turnaround already achieved, and we’re on track for another $1 billion turnaround this year.”
The “secret” behind Ascension’s transformation, according to Mr. Tripathi, lies in three core internal principles:
- CTC: Control the Controllables — “As CFOs and operators, there’s so much we can influence. We stay focused and avoid distractions,” he said.
- BTB: Break the Bracket — “In ministries where you’re underperforming, use data-driven operational strategies to move out of that bracket.”
- EMS: Every Ministry should be Sustainable — “Each hospital must be self-sustaining; you can’t keep borrowing from another to survive. Every entity must stand on its own from a capital standpoint.”
Ascension has also focused on reducing the total cost of care by steering patients to more appropriate, lower-acuity sites.
“In geographies with complex, chronic patients going straight to the ED, we’ve asked: ‘Can we redirect them to urgent care or primary care earlier?’” Mr. Tripathi said. “It’s the right thing for patients, keeping them out of acute care when it’s not needed. It’s right for providers, reducing the cost of care. And frankly, insurers appreciate it too, since claims are significantly lower under that model.”
In addition to operational focus, Ascension is deepening collaboration with payers through data and network strategies. It recently established the Ascension Data Science Institute — a team of about 700 data scientists, including statisticians and PhDs.
“They analyze data from both payer and provider perspectives, offering insights into areas like value-based care, cost of care and site of care,“ Mr. Tripathi said. “They work closely with our strategy team to identify opportunities to build networks that help payers care for their members — and allow us, as providers, to serve those members in the best possible way.”
Drawing from his own experience in the payer space, Mr. Tripathi described an ideal payer-provider alignment:
“When I think about the ideal state, both payers and providers are aligned in delivering the best services to members or patients at the lowest cost and the highest clinical quality. That’s when the trifecta happens: payers and providers align on insurance policies, providers commit to low-cost, high-quality care, and members receive that care in the setting they prefer,” he said. “It’s critical to reflect that alignment in the contract language — and ensure adherence to it. Ultimately, it’s all data-driven and guided by strategic minds.”
Ascension reported a $143 million operating loss (-2.2% margin) in the fiscal second quarter ending Dec. 31, compared to a $38.5 million operating gain (0.5% margin) in the same period the previous year. Still, signs of improvement are emerging, the system noted, citing volume recovery and economic improvement plans delivering “significant operational results.”
“Ascension continues to build momentum,” President Eduardo Conrado said in a news release. “Our Q2 FY25 results demonstrate the meaningful progress we are making in strengthening our financial position, with a $1.3 billion improvement in recurring operating performance from Q4 FY24. With same-facility revenue increasing by 1.5%, we are further enhancing our ability to invest in the resources and care that support our communities.”
