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Nonprofit hospitals skimp on charity whereas CEOs reap thousands and thousands, report finds


The Robert Wood Johnson University Hospital in New Brunswick, New Jersey.
Enlarge / The Robert Wooden Johnson College Hospital in New Brunswick, New Jersey.

Nonprofit hospitals are beneath growing scrutiny for skimping on charity care, relentlessly pursuing funds from low-income sufferers, and paying executives huge multi-million-dollar salaries—all whereas incomes tax breaks totaling billions.

One such hospital system is RWJBarnabas Well being, a big nonprofit chain in New Jersey, whose CEO made a whopping $17 million in 2021, whereas the hospital system solely spent 1.65 % of its almost $6 billion in income on charity care.

Sen. Bernie Sanders (I-Vt.), chairman of the Senate Well being, Schooling, Labor, and Pensions (HELP) Committee, is gearing up for a showdown subsequent week with the CEO of RWJBarnabas Well being, Mark Manigan. Nurses at one of many chain’s places, Robert Wooden Johnson College Hospital, are on strike, saying that the power has develop into a harmful place to work because of insufficient staffing ranges.

“I sit up for listening to how [Manigan’s] well being care system may afford to spend over $17 million on CEO compensation in 2021 and the way his hospital may afford $87 million on touring nurses because the strike started, however by some means can not afford to mandate secure staffing ratios to enhance the lives of sufferers and well being care employees,” Sanders mentioned in a press release this week.

RWJBarnabas Well being is much from alone in having plump govt pay and slim charity care spending. A HELP committee employees report launched earlier this month examined the monetary information on 16 of the nation’s largest nonprofit, tax-exempt hospital methods. The methods collectively make greater than $3 billion in income annually, however in 2021, 12 of the 16 methods spent lower than 2 % of their income on charity care—regardless that, as nonprofits, they earn federal, state, and native tax exemptions for offering charity care to low-income individuals and different charitable group advantages. Of these 12 spending lower than 2 %, six of them spent lower than 1 %.

In the meantime, CEO compensation for the 16 methods averaged over $8 million, with a collective complete of over $140 million. By far, the largest earner was the CEO of CommonSpirit Well being, a large Catholic nonprofit system that runs 139 hospitals in 21 states. In 2021, CommonSpirit’s CEO made $32 million. In the identical 12 months, the system spent $507 million on charity care, or 1.5 % of its $33 billion income.

Along with failing to supply low-income sufferers with free or lower-cost care, among the well being methods ruthlessly sought fee, sending sufferers to assortment companies, putting liens on their property, and garnishing wages.

Allina Well being System, which runs nonprofit hospitals in Minnesota and western Wisconsin, denied offering medical care and blocked appointments for sufferers—even youngsters—if that they had excellent hospital payments. In 2021, Allina spent 0.3 % of its income on charity care whereas its CEO made $3.5 million. Solely after media consideration did the hospital system change its coverage.

The findings are notably troubling given the thousands and thousands of {dollars} that hospitals reap with their nonprofit standing. In 2020, the nation’s 2,978 nonprofit hospitals collectively obtained an estimated $28 billion in federal, state, and native tax advantages because of not paying these taxes, based on an evaluation by the Kaiser Household Basis. That works out to a mean of $9.4 million per hospital—and accounts for 44 % of nonprofit hospitals’ collective web earnings (income minus bills) for that 12 months.

The Senate employees report concluded by accusing the hospital methods of “value gouging.”

“The disparities between the paltry quantities these hospitals are spending on charity care and their huge revenues and extreme govt compensation demonstrates that they’re failing to reside as much as their finish of the non-profit discount,” the report reads.

The American Hospital Affiliation, in the meantime, blasted the report, saying it’s “completely off base and doesn’t totally account for the big selection of group advantages that hospitals present.” The Affiliation pointed to its personal analysis, which recommended that tax-exempt hospitals offered $129 billion in complete advantages to their communities in 2020.

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