Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet!–Matthew Holt
In this week’s health care tidbits, we’re discussing hedge funds. Not those small private equity funds that are defunding small safety net hospitals and being exposed by Propublica & PBS Frontline. (Did you catch #TCHBGangster Jeff Goldsmith on the latter?). No, I’m talking about big non-profit hedge funds that also provide some health care services. This week two of them reported results.
Famed regional hedge fund Mayo Clinic’s health services business reported $243m profit on $3.7bn revenue for Q1 2021. Not exactly Apple margins, but a respectable 6.5%. While catholic national hedge fund Ascension eeked a $700m profit on $20bn of revenue in the nine months June 2020 to March 2021. The good news is that Mayo has $15bn in its main trading account while in those nine months Ascension made $4.3 Billion on Wall Street bringing its balance to a healthy $25.6 Bn.
And if you were concerned that these hedge funds were in trouble because of the pandemic, well not only do they avoid property, income tax and more they also got plenty of help from the taxpayer. CMS prepaid $2billion of Medicare payments to Ascension; presumably they made a tad more playing the markets with that. Then there’s the non-refundable CARES Act grants. Yes Ascension has been paid $900m since June 2020 ($1.1billion in all) and Mayo received $356m, although they were nice enough to pay $138m back.
I’m sure those Americans who lost their jobs, their houses and waited for months for government help are glad that–despite the pandemic–these hedge funds weren’t having to dip into their main reserves to keep their health services subsidiaries going…..