UW Health, a $3.8 billion health system that operates in several states and earned $550 million in 2021. It contributed $50 million to the mother ship, arguably, an inadequate return to UW Madison, which owns its buildings and receives below market rent.
Quartz, an HMO insurance company operates in four states. It had revenues of $1.8 billion in 2021. Its profits are murky because of payments to a range of owners. This is a non-core asset that could be worth as much as $500 million. What is the university doing in the health insurance business? A spin-out, as already done by Northwestern University, could provide funds for other UW System priorities. One example is the strategically necessary expansion of the engineering facilities at our two flagship campuses.
The Wisconsin Alumni Research Foundation (WARF) manages the university’s intellectual property. It has a long track record and now has assets of a whopping $3.9 billion. It runs as a separate entity. Its financials are not consolidated with UW Madison’s. Its license revenues have fallen off.
UW Madison Foundation, is another separate but related entity with more than $3 billion in assets.
At the system level is another complex of resources including 25 other campuses, other smaller foundations and a rich array of “centers” doing work in strategic academic sectors. All of the above require sophisticated, transparent and accountable governance.
The case can be made that financial oversight of the system as a whole and UW Madison in particular has been lacking. Inadequate governance can lead to problems. For example, some members of the Board of Regents in the past and at present have worked for organizations doing major business with UW Madison. Some UW affiliated board members are paid, others are not. The cross-overs may not rise to the glaring example of the Enron mess uncovered in 2001. But the cross-overs are certainly not transparent.