Bernie on Nonprofit Hospitals and Charity Care

Senator Sanders issued a report yesterday bemoaning, for the umpteenth time, the fact, assertion, belief, or rumor that nonprofit hospitals are not earning their keep by way of charity care.  The American Hospital Association either had an early copy, a spy, or it just repackaged the same ol’ response.  Because the response came out almost before the report.  Anyway, in his role as Chair of the Committee on Health, Education, Labor and Pensions Committee, Bernie lays it out, stating that hospitals hound patients and deny charitable care to fund eye-popping salaries for top hats:

Non-profit Hospitals Fail to Meet the Critical Need for Medical Care

In 2022, about one in seven Americans delayed or went without hospital services due to high costs. These delayed hospital services could include surgeries, diagnostic testing, and a range of highly specialized treatments. Those delays create much higher risks of more serious conditions, worse health outcomes, and higher costs for patients. Non-profit hospitals could play a significant role in delivering necessary care to Americans while also satisfying their charity care obligations. Instead, these hospitals continue to hoard their resources to the detriment of the patients they claim to be committed to serving. Committee staff reviewed tax documents for 16 major non-profit hospital chains that each take in more than $3 billion in revenue annually. Twelve of the 16 dedicate less than two percent of their total revenue to charity care, including three of the nation’s five largest non-profit hospital chains. Of those twelve, six dedicate less than one percent of their total revenue to charity care.

In recent years, non-profit hospitals have provided less charity care even as these hospitals saw a steady increase in their revenues and operating profits. One study found 86 percent of non-profit hospitals spent less on charity care than they received in tax benefits between 2011 and 2018. Another recent study found that non-profit hospitals increased their average operating profit by more than 36 percent, from about $43 million to almost $59 million, between 2012 and 2019. In the same time period, the hospitals almost doubled the cash balances they held in reserve, from an average of about $133 million to more than $224 million. Those additional operating profits and reserve funds were not used to help those most in need: in the same time period, average charity care spending dropped from just $6.7 million to $6.4 million.

While these hospitals provide woefully insufficient care to the patients most in need, they provide massive salaries to their top executives. In 2021, the most recent year for which data is available for all of the 16 hospital chains, those companies’ CEOs averaged more than $8 million in compensation and collectively made over $140 million. CommonSpirit Health led the way, with a combined $32 million compensation package for the outgoing and incoming CEOs. In the same year, the company spent only 1.5 percent of its revenue on charity care.

darryll k. jones