By Adam Andrzejewski of OpenTheBooks substack
OpenTheBooks.com auditors investigated America’s healthcare system and found so-called “non-profit” hospitals and their CEOs are getting richer while the American people are getting sicker and poorer.
Topline
The 20 largest non-profit hospitals in the country continued making massive profits while their cumulative net assets soared to $324.3 billion in 2021 from $200.6 billion in 2018. The year 2021 is the latest year available for cross-comparison purposes.
Those hospital systems received congressional Covid bailouts of $23 billion and only two providers partially paid their Covid bailout back.
Meanwhile, hospital executives racked up Wall Street-sized compensation packages which frequently exceeded $10 million per year. For example, the CEO at Ascension Healthcare based in St. Louis, Missouri made $13 million in 2021 – with three-year pay exceeding $22 million.
Furthermore, American life expectancy during this period sharply declined by a staggering 2.5 years from 2019 through 2022. While “comparable country averages” rebounded from a Covid-related drop in 2021, the U.S. continued declining in life expectancy.
Yet, the cost of health care is still astronomically high, as the average family paid $22,463 in health insurance premiums in 2022. That does not include out-of-pocket costs like co-pays and deductibles, which can be thousands more.
This has led to medical debt for about 100 million Americans.
In 2020, the Trump administration issued, and the Biden administration finalized (January 2021) a healthcare transparency rule – to spur market competition and inform patients.
Yet, two years after the rule took effect, an independent audit found that nearly three-quarters of hospitals in the country were not complying— flouting the mandate that prices be posted clearly and comprehensively.
Big Numbers
The 20 largest non-profit hospital systems saw their combined net assets soar 62 percent, or $124 billion, in the three years to 2021. You — the U.S. taxpayer — funded rocket ride. Examples:
- The world-famous Mayo Clinic: Astounding 92 percent jump to $17.7 billion in 2021 from $9.2 billion in 2018.
- Cleveland Clinic Health System: Up 60 percent to $15.6 billion in 2021.
- Intermountain Healthcare: Up 63 percent to $11.6 billion. Tellingly, Colorado Governor Jared Polis had earlier cited Colorado hospitals for ‘non-profit profiteering.’
- Northwestern Medicine: Up 43 percent to 11.9 billion.
- Indiana University Health System: Up 47 percent to $10.3 billion from $7 billion in 2018.
Yet, not one of these systems complied fully with U.S. government price transparency rules, according to a key health care watchdog.
Crucial Quote
“This blatant obfuscation of prices and flouting of the rule demonstrates that implementation and enforcement efforts must be rigorously examined and markedly strengthened to improve compliance, enable technology innovators to parse the pricing data, and empower American consumers with upfront prices,” Patient Rights Advocate (PRA), in its February 2023 report.
PRA, a nonprofit fighting for systemwide healthcare price transparency, reviewed the websites of 2,000 U.S. hospitals, focusing on the nations’ largest health systems. In February 2023, the group found that under 25-percent were in complete compliance. In August 2022, PRA found only 16-percent of hospitals were compliant.
Yet only four hospitals have been fined by the Centers for Medicare & Medicaid – the federal agency responsible for creating and enforcing health and safety guidelines. CMS fined two in June 2022 and two more in April 2023.
A Deeper Dive
Here are the financial breakdowns of ten large non-profit hospitals systems with all or most of their hospitals non-compliant on price transparency. We reached out to each of these hospitals for comments and context.
Numerous hospital spokespeople point to their absence from the short naughty list (only four hospitals fined) as evidence that they’re following the law. However, the Department of Health and Human Services Inspector General is investigating CMS for not properly monitoring and enforcing the healthcare price transparency rule.
Ascension Healthcare
- 2021 Net assets: $29.3 billion
- 2018 Net assets: $23.5 billion
- Top Paid Exec Salary: $13 million
- Covid-19 Aid Received: $2.7 billion source
- Hospitals in compliance: 4 out of 105 reviewed of Ascension Healthcare’s 139 hospitals.
- Percent compliance: 4%
Ascension spokesperson Nick Ragone said, “We are proud to be a leader in price transparency — not only complying with the rule but going beyond it, to offer consumers tools to estimate costs and provide feedback. CMS itself has indicated that only a small number of hospitals across the country are not in compliance. We will continue to find ways to make sure consumers and patients have the most current information available to make an informed healthcare decision.”
Baylor Scott & White Health
- 2021 Net assets: $8.6 billion
- 2018 Net assets: $6 billion
- Top Paid Exec Salary: $4.5 million
- Covid-19 Aid Received: $1 billion source
- Hospitals in compliance: 9 out of the 41 reviewed. Baylor Scott & White Health has 51 hospitals.
- Percent compliance: 22%
A Baylor Scott & White Health spokesperson said the report is wrong and that their facilities are complying, and noted, like many others, that CMS determines compliance.
“Baylor University Medical Center and Baylor Scott & White Medical Center – Temple have been found to be in compliance with Federal price transparency rules by CMS,” the spokesperson said. “Further, all remaining Baylor Scott & White facilities are in alignment with the facilities found to be in compliance by CMS.”
“In addition, the Texas Health and Human Services Commission has reviewed all Baylor Scott & White facilities and found them to be in compliance with state price transparency rules.”
Bon Secours Mercy Health
- 2021 Net assets: $9.8 billion
- 2018 Net assets: $1.8 billion
- Top Paid Exec Salary: $15.7 million
- Covid-19 Aid Received: $1.1 billion source
- Hospitals in compliance: None of the 39 reviewed. Bon Secours has 48 hospitals.
- Percent compliance: 0%
A hospital spokesperson did not return a request for comment by our deadline.
Houston Methodist
- 2021 Net assets: $10.1 billion
- 2018 Net assets: $5 billion
- Top Paid Exec Salary: $3.5 million
- Covid-19 Aid Received: $580 million source
- Hospitals in compliance: None of the three reviewed. Houston Methodist has eight hospitals.
- Percent compliance: 0%
A spokesperson linked to their standard charge file, and said, “CMS and the state of Texas consider us compliant under federal law.”
Kaiser Permanente
- 2021 Net assets: $52.8 billion
- 2018 Net assets: $32.2 billion
- Top Paid Exec Salary: $6.2 million
- Covid-19 Aid Received: $500 million source
- Kaiser Permanente returned its Covid-aid, except Kaiser Foundation’s subsidiary, Maui Health System, which kept $11.8 million in aid.
- Hospitals in compliance: Three out of Kaiser Permanente’s 39 reviewed hospitals.
- Percent compliance: 7.7%
A hospital spokesperson did not return a request for comment by our deadline.
New York-Presbyterian Healthcare System
- 2021 Net assets: $11 billion
- 2018 Net assets: $8.3 billion
- Top Paid Exec Salary: $12.4 million
- Covid-19 Aid Received: $124 million source and source
- Hospitals in compliance: None of the 10 reviewed. New York-Presbyterian has 10 hospitals.
- Percent compliance: 0%
A hospital spokesperson did not return a request for comment by our deadline.
Providence St. Joseph Health
- 2021 Net assets: $17.7 billion
- 2018 Net assets: $14 billion
- Top Paid Exec Salary: $10.9 million
- Covid-19 Aid Received: $3 billion source
- Hospitals in compliance: None of Providence St. Joseph’s 52 hospitals.
- Percent compliance: 0%
A hospital spokesperson did not return a request for comment by our deadline.
Texas Health Resources
- 2021 Net assets: $9.5 billion
- 2018 Net assets: $6 billion
- Top Paid Exec Salary: $2.9 million
- Covid-19 Aid Received: $283 million source
- Hospitals in compliance: Not one of the nine reviewed. Texas Health has 27 hospitals.
- Percent compliance: 0%
“Texas Health is compliant with federal and state price transparency legislation,” spokesperson Kimberly Walton said. “Patients should have access to tools to help them understand their out-of-pocket costs for care and Texas Health is committed to providing the best possible estimation of healthcare services to our patients.”
“Everyone’s situation is unique, and a patient’s out-of-pocket expense is based on their healthcare plan, benefit coverage, current health year expenditures and clinical needs. Texas Health offers a cost estimation tool on its website, but what sets us apart is the more personalized service of our financial counselors. We have invested in a team that provides much more personalized assistance and service than any web tool.”
Trinity Health
- 2021 Net assets: $18.5 billion
- 2018 Net assets: $13.3 billion
- Top Paid Exec Salary: $2.9 million
- Covid-19 Aid Received: $2.3 billion source
- Hospitals in compliance: 2 out of the 61 reviewed. Trinity has 88 hospitals, in total.
- Percent compliance: 3%
A hospital spokesperson did not return a request for comment by our deadline.
UPMC (University of Pittsburgh Medical Center Group)
- 2021 Net assets: $11.3 billion
- 2018 Net assets: $5.7 billion
- Top Paid Exec Salary: $9.5 million
- Covid-19 Aid Received: $1.4 billion source
- Hospitals in compliance: None of the 33 UPMC hospitals reviewed of its 40 total.
- Percent compliance: 0%
A hospital spokesperson did not return a request for comment by our deadline.
Critics
Frustrated by lax enforcement against hospitals that aren’t complying with the rule, NYC Councilwoman Julie Menin, a Democrat representing parts of Manhattan, sponsored a bill in New York City Council to create the Office of Healthcare Accountability.
“The office would have the authority to publish and compare hospital pricing, audit city expenditures on employee-related health care costs, grade hospitals on their compliance with pricing transparency measures, and make recommendations on how to lower these costs,” she and co-author Councilwoman Carmen De La Rosa wrote in a February op-ed in the New York Daily News.
They called out the New York City hospitals that are not following the law.
“Private health care networks such as New York–Presbyterian, Montefiore Medical Center and NYU Langone, continue to skirt the intent of federal price regulations by having price transparency tools that are confusing, time consuming and designed to not be user friendly,” the councilwomen wrote.
Summary
Weighty questions jump from these facts:
- If we are spending more, and hospital assets are increasing markedly, why has U.S. life expectancy dropped 2.5 years?
- Are these “non-profit” hospitals operating in the public interest or their private interest?
- Why don’t hospital systems pay back the Covid aid, like Kaiser Permanente?
- Are these non-profit hospitals gaming the system as public healthcare charities operating under IRS section 501(c)3 of the tax code?
- Why are systems that score less than 100 percent compliance on price transparency allowed to keep taxpayer-funded bailout dollars?
Compliance is not impossible. Patient Rights Advocate found 489 hospitals with “exemplary” files and described as “easily accessible, downloadable, machine readable, and including all negotiated rates by payor and plan.”
The federal price transparency rules are clear. One of every four hospitals follow those rules. They comply with price disclosure. CMS needs to enforce the rules on three-quarters of hospitals that ignore those same rules.
America’s non-profit hospitals must justify their pandemic profiteering. In the top 20 largest non-profits, for every $1 in Covid bailout from the U.S. taxpayer, their net assets jumped — on average — $5.
The American people have paid a fortune to these hospitals — $23 billion in Covid aid alone. The least they could do is heal themselves.
ADDITIONAL READING
- Top U.S. Non-Profit Hospitals & CEOS Are Racking Up Huge Profits | Forbes | By Adam Andrzejewski | June 26, 2019
- Rich Hospitals, Poor Safety Plan Leading Up To Coronavirus. Should Rules Change For Them Now? | USA Today | By Jayne O’Donnell | May 11, 2020
- Top 82 U.S. Non-Profit Hospitals: Quantifying Government Payments And Financial Assets | OpenTheBooks Oversight Report | June 2019
