Nonprofit Hospitals Face Scrutiny Over Tax Breaks and Executive Pay
A new report alleges that major tax-exempt hospital systems are using public subsidies for high executive compensation and layoffs while providing minimal charity care.
Research into the nation’s biggest tax-exempt hospital networks shows they benefit from substantial public funding while delivering scant charity care. Executives at these systems enjoy multimillion-dollar compensation packages and perks, even as they lay off frontline workers. Rush University Medical Center in Illinois, which has taken nearly $75 million in state aid and over $194 million in federal awards, paid its CEO more than $3.6 million and invested over $167.8 million abroad.
New York-Presbyterian Hospital System, part of a $750 million settlement for sexual-abuse claims, raised its CEO’s pay from $8.9 million to over $23 million and cut roughly 1,000 jobs, while allocating only about 1 % of revenue to charity care. These patterns suggest that many nonprofit hospitals operate like large for-profit corporations, prompting calls for stronger accountability and possible revocation of tax-exempt status.
Why it matters
Tax-exempt hospitals consume public funds yet may not be delivering the promised community benefits.
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