Message from Board Chair Message from CEO Message from Sponsor Chair

The first full year of Ascension, the parent organization of Ascension Health, was one of both challenges and opportunities. The pace of change for U.S. healthcare accelerated dramatically due to a number of factors, including:

  • A changing economic environment, fueled by continued weakness in the overall economy, movement of individuals to new coverage options such as high-deductible health plans, and changes as a result of the Affordable Care Act.
  • More places and ways for people to receive healthcare services, such as at retail stores and through the Internet, and even using smartphones.
  • Continued transition of care out of the hospital to outpatient settings, including physician offices.
  • Greater movement toward healthcare providers and systems assuming responsibility for the health of groups of individuals (“populations”), whereby providers are incentivized not for the number of procedures we do or services we provide, but by how healthy we can keep people–what we call being paid for value, not volume.
  • Continued technological advancements, both in the inpatient setting and with outpatient testing and services.

In the face of these tremendous changes, Ascension continued true to our Mission. In fiscal year 2013, Ascension provided more than $1.48 billion in Care of Persons Living in Poverty and Other Community Benefit, representing an 11.4 percent increase from the prior year. While part of this increase was due to the addition to Ascension Health of Ministry Health Care in Wisconsin and Minnesota, St. John Health System in Oklahoma, and Via Christi Health in Kansas, it also reflects the increasing needs of individuals in all the communities we serve.

This achievement is a result of the difficult work being accomplished every day in our various subsidiaries, each of which is focusing energies and resources into initiatives that help us address current changes and anticipate those yet to come, all for the sake of our Mission to serve all persons with special attention to those who are poor and vulnerable.

Our one national health ministry is stronger than the sum of its individual parts. Those parts include:

  • Ascension Health, which faced tremendous challenges this year. Like other healthcare delivery systems across the country, our Health Ministries made difficult choices in order to strengthen our ministry, including workforce restructurings in many communities. At the same time, Ascension Health made great progress in many important initiatives in support of our Strategic Direction promise to provide Healthcare That Works, Healthcare That Is Safe, and Healthcare That Leaves No One Behind, for Life. Notably, Ascension Health has begun a new focus on streamlining, standardizing and consolidating in order to take advantage of its size and scale. This shift will not be easy, but I am confident in the ability of our leaders to make the changes necessary to ensure the success of our national health ministry into the future so that we can continue to live our Mission and realize our Vision.
  • Ascension Global Mission, which has collaborated with other organizations to create the Global Health Partnership Initiative (GHPI). GHPI’s vision is to improve the health of vulnerable populations, beginning in partnership initiatives in Guatemala and Zambia. This work in support of our Mission advances the goals of our founders, who worked tirelessly to address unmet needs, often in locations that were foreign to them and distant from those they loved.
  • Ascension Holdings, which has begun to explore new relationships and innovative ideas domestically and across the globe to expand the horizons and possibilities for our health ministry. The first such project, Health City Cayman Islands, brings the promise of learning new approaches to building and operating facilities from our partner, Narayana Health of India, that can help us address the high costs of providing care in the United States. This remarkable public-private partnership brings together individuals and organizations from three nations to build and operate a world-class medical facility outside of the U.S. The first phase of Health City Cayman Islands is being constructed in just one year, and progress has been made in all areas of the project in preparation to begin seeing patients in early 2014.
  • Medxcel, an example of the great things that can happen when an idea that starts in a department at one of our hospitals, is nurtured and supported. Medxcel, growing out of the Biomedical Engineering department of St.Vincent Health in Indianapolis, is now a major and growing international business with a number of focus areas, primarily managing medical equipment so that it operates efficiently for clients across the United States and abroad. Modern Healthcare reports that TriMedx, a Medxcel subsidiary, is the largest provider of clinical engineering services in the United States.
  • Ascension Investment Management, which manages $27 billion in assets—including $4 billion for clients other than Ascension—to create positive financial returns through socially responsible investing.
  • Ascension Clinical Holdings, which through its new division, Ascension Physician Services, is beginning to unlock the value inherent in our Systemwide physician enterprise.
  • Ascension Information Services, which last year again was named to the Computerworld list of Best Places to Work in IT, a vivid reflection of our Model Community commitments. AIS was able to grant service-fee rebates in excess of $30 million back to the Health Ministries of Ascension Health as a result of various cost-saving initiatives. This contribution to our operating strength is further evidence of responsible financial stewardship in support of our Mission.
  • Ascension Risk Services, which successfully manages the risk for our entire national health ministry and was able to achieve $76 million in surplus distributions to our Health Ministries, furthering their ability to provide care for all persons with special attention to those who are poor and vulnerable.
  • Ascension Ventures, our venture capital subsidiary, which closed its third venture capital fund with the participation of six other healthcare organizations as limited partners. Ascension Ventures is making an important contribution to the future of our national health ministry through returns generated by its strategic investments and its perspective on new business models, solutions and technologies, with the advice and counsel of our ethicists, that can help advance healthcare in the United States.
  • The Resource Group, which has a positive impact on supply expenses at all of our Health Ministries while maintaining or improving the quality of supplies and equipment. The Resource Group is an end-to-end resource and supply management organization that provides Change Management, Field Operations, Implementation, and User-Directed Strategic Sourcing™ solutions to its participants. In addition, The Resource Group operates a group purchasing organization (GPO) that allows it to extend its contractual pricing to Ascension and The Resource Group’s external participants regardless of geography or size.
  • Ascension Leadership Academy, a vitally important commitment to formative development for those who will hold significant roles essential to the future of our health ministry. The Academy prepares these leaders for courageous innovation and the practice of virtuous leadership. We have great confidence in the future of our national health ministry knowing that the Ascension Leadership Academy is helping to prepare the Mission-focused, dedicated leaders of tomorrow. The second Leadership Academy Community of participants begins its formation work in fiscal year 2014.
  • CHAN HEALTHCARE, a partnership with Catholic Health Initiatives, which has been key to ensuring financial integrity through the internal audit services it provides to Ascension and other healthcare clients. CHAN HEALTHCARE recently entered into a partnership with Crowe Horwath, a global accounting firm, which will further strengthen its ability to serve clients nationwide.
  • Ascension Health Care Network. After more than two years of experience since the launch of Ascension Health Care Network (AHCN) in early 2011, Ascension achieved a deeper understanding of how best to strengthen Catholic healthcare in communities across the nation. Due to the rapidly changing healthcare environment, the focus of AHCN has shifted to explore ways to provide the capabilities for population health management to meet the needs of individuals and communities across the full care continuum.

Lastly, we were busy with transactions during the year designed to strengthen the national health ministry and the Mission.

We welcomed the Health Ministries of the former Marian Health System to Ascension Health on April 1, 2013, with its sponsor, the Sisters of the Sorrowful Mother, becoming part of Ascension’s sponsorship structure.

We entered into an affiliation agreement with the Daughters of Charity Health System, based in California, in December 2012.

As our work to innovate, transform and re-imagine healthcare goes forward, I know we can continue to rely on the skills, expertise and dedication of the more than 155,000 women and men working across our national health ministry. Their focus on our Mission, rooted in the healing ministry of Jesus, is our greatest strength and our hope for a bright future for our ministry and the communities we serve.

Anthony R. Tersigni, Ed.D., FACHE

President and Chief Executive Officer

Anthony R. Tersigni,

President and Chief
Executive Officer

When Ascension (then called Ascension Health Alliance) was created in January 2012, it represented a significant change for the nation’s largest nonprofit, Catholic healthcare system. The change was designed to ensure the sustainability of our national health ministry to carry out our Mission of serving all with special attention to those who are poor and vulnerable by enabling the ministry to operate more effectively in a changing environment by increasing clarity, focus and accountability in every part of the organization.

Thanks to the hard work of thousands of associates, physicians and volunteers across our national health ministry, that promise is being fulfilled through the successes of the various Ascension subsidiaries, which you will read about in this report.

Our subsidiaries are making tremendous progress in many areas to improve services provided by our own Health Ministries and the Catholic healthcare ministry in the United States — through improving quality, streamlining decision-making, reducing expenses, and coordinating the activities of our physician practices across the country so they can work together more effectively and learn from one another.

At the same time, the Health Ministries of Ascension Health are leading the way in improving patient safety and clinical effectiveness, while providing holistic, person-centered care with a focus on providing a consistent, exceptional experience for those we serve.

Meanwhile, in Washington, D.C., in state capitals and in communities across the country, we’re working with legislators, policymakers and other organizations to improve healthcare access and affordability, consistent with our Catholic Identity.

All of this work is taking place in the context of a radically changing healthcare environment. And Ascension is helping lead the needed changes.

As we are engaged in this important work, I’m confident that the leaders, associates, physicians, volunteers, and all those we work with across our national health ministry have the dedication and skills required to meet current and future challenges. Together we are re-imaging healthcare and creating a bright future.

Sr. Kathleen Kelly, CSJ

Chair, Ascension Board of Directors

Sr. Kathleen Kelly CSJ,

Board Chair

As chair of the Ascension Sponsor, I am honored to represent those entrusted to ensure that our national health ministry, rooted in the loving ministry of Jesus as healer, remains true to our Mission of serving all persons with special attention to those who are poor and vulnerable.

This is especially challenging today for our ministry, and our nation, for a number of reasons that are well known. As we navigate this turbulent environment, we maintain continued fidelity to Catholic Identity and to the Mission — the healing ministry of Jesus. During the past year we focused on the following key areas.

Strengthening through formation

We believe that formation of the members of the Ascension Sponsor, all of the Ascension Boards, and our future leaders, physicians and associates is the foundation upon which we sustain, strengthen and perpetuate Ascension as a health ministry of the Catholic Church.

While our model of sponsorship has changed and now has multiple dimensions (religious women, religious men, laity), the members of the Ascension Sponsor maintain the clarity and responsibility of Catholic healthcare, as a ministry of the Church, with special focus on the needs of those persons most poor and vulnerable.

The members of the Ascension Sponsor fully recognize the continued importance of and need for communio: the organic life of the Church where the diversity of gifts — like the various parts of the body — work together in complementary ways to usher in God’s reign. Historically, it has been community that has sustained the ministry from one generation to the next.

We are aware that, just as the Spirit imparted gifts — the founding charisms — that drew together the members of our founding religious congregations to meet the needs of the times, there is an emerging charism unfolding for this new model of sponsorship to address the needs of these times as well. The sharing of formation and reflection at each meeting of the Ascension Sponsor provides the holy space for the work of the Spirit. The members of the Ascension Sponsor are mindful of, and attentive to, the movement of the Spirit in the unfolding of our conversations.

Strengthening through partnerships and collaborations

The Ascension Sponsor also remains committed to strengthening the Catholic health ministry in the United States through:

  • Welcoming the participation of other religious and non-congregational sponsors as Participating Entities of the Ascension Sponsor — specifically the Congregation of the Sisters of the Sorrowful Mother of the Third Order Regular of St. Francis of Assisi, US/Caribbean Province, when their Marian Health System joined Ascension Health on April 1, 2013.
  • Affiliating with other Catholic health systems to provide access to resources and strategic alliances that might otherwise be unavailable to them — specifically Daughters of Charity, Province of the West, when Ascension Health reached an Affiliation Agreement with the Daughters of Charity Health System in December 2012.
  • Increasing our geographic presence and influence in both the United States and the world — specifically Health City Cayman Islands and Ascension Global Mission, which you can read more about in this annual report.

In addition, our organization was honored when Anthony R. Tersigni, EdD, President and Chief Executive Officer of Ascension, was appointed to serve an initial four-year term as President of the International Committee of Catholic Health Care Institutions (CIISAC) effective November 2012. The CIISAC was established in 1984 by the Pontifical Council for Health Care Workers to coordinate the activity of Catholic healthcare institutions worldwide. The CIISAC membership includes religious and lay representatives from Africa, Central America, South America, Asia Europe, North America and Oceania.

This is a high honor and one that speaks to the Vatican’s trust and respect of Tony’s international leadership and commitment to Catholic healthcare, and to Ascension’s Mission to care for those who are poor and vulnerable.

We are eager to share our Ascension Annual Report with you because it reflects the tireless work so many are doing each and every day serving others. Together, we are a community of faithful servants accomplishing good in the midst of great need. Rejoice and be glad.

Yours in Christ as Healer,

Gino Pazzaglini

Chair, Ascension Sponsor

Gino Pazzaglini

Sponsor Chair