Some researchers wonder if CEOs' ballooning paychecks align with what’s best for patients and taxpayers.
There are more than 4,600 hospitals in the U.S., and 49% of them are nonprofit and therefore tax-exempt. The CEOs of these nonprofit health systems now earn, on average, $1.3 million a year. of hospitals in the U.S. are nonprofits, which means they don’t pay local, state or federal taxes. In return, the hospitals provide medical care, a social benefit, to their communities.
Compensation for CEOs of nonprofit hospitals and medical systems grew by 30% between 2012 and 2019, according to a newThat means the average paycheck for a top executive went from just under $1 million to $1.3 million, according tononprofit health systems consistently deliver on their mission, which is to provide quality, affordable care.
The question is whether the nonprofit medical systems achieving these rosy profit margins are doing so at the expense of their missions, subverting the intended purpose of their tax-exempt status.found that less than half of nonprofit hospitals notify patients that they qualify for financial assistance before attempting to collect on an outstanding payment.
While Bielamowicz agrees with Ho that more transparency is needed on how hospital boards set priorities, she explains that even nonprofit health systems must generate a “positive operating margin.” Tax breaks afforded to these nonprofits have allowed them to become hyper-competitive, Bai said, and this has led to a wave of mergers and acquisitions in the health care sector. Back in 2005, 53% of community hospitals belonged to a larger health system, according to data
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