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Nonprofit hospitals are facing intensifying scrutiny on Capitol Hill, as lawmakers questioned whether the billions in tax breaks they receive are justified \u2014 and whether some systems should risk losing that status altogether.<\/span><\/p>\n The House Ways and Means Committee hearing Tuesday, which followed <\/span>a targeted campaign<\/span><\/a> by watchdog group Consumers\u2019 Research, exposed a growing bipartisan unease with how nonprofit hospital systems operate at a time of rising costs and persistent complaints from patients.<\/span><\/p>\n At the center of the debate was a stark indictment from Committee Chairman Rep. Jason Smith (R-MO), who argued that the nonprofit designation no longer reflects reality. <\/span>\u201cFor-profit hospitals are legally required to put shareholders over patients, but so-called nonprofit hospitals rarely act much different,\u201d Smith said in his opening statement. \u201cTax-exempt hospitals deliver charity care that is consistently worth less than the tax breaks that they receive. These nonprofit hospitals receive a $28 billion tax break while only spending roughly $16 billion on charity care a year. The difference fuels a spending spree totally unrelated to providing health care, like real estate investments, stadium naming rights, green energy initiatives, and political activism.\u201d<\/span><\/p>\n That imbalance, tens of billions in tax advantages compared to significantly less in direct charity care, became one of the central tensions of the hearing, raising the question: What exactly are taxpayers subsidizing?<\/span><\/p>\n Rep. Lloyd Smucker (R-PA) pressed hospital executives directly on whether the nonprofit designation still reflects reality. \u201cI don\u2019t know that I see a lot of difference between a for-profit and a nonprofit,\u201d Smucker said. \u201cMr. Hazen, you\u2019re the for-profit [CEO on the panel]. Do you think there\u2019s much difference in the way hospitals that are designated for-profit operate differently than a nonprofit?\u201d<\/span><\/p>\n \u201cThe short answer is no,\u201d replied Sam Hazen, CEO of HCA Healthcare.<\/span><\/p>\n Smucker then turned to executive compensation, questioning non-profit CommonSpirit Health CEO Wright Lassiter. \u201cYour compensation was $21 million last year. Is that correct?\u201d Smucker asked.<\/span><\/p>\n \u201cThat\u2019s not correct,\u201d Lassiter responded.<\/span><\/p>\n \u201cWhat was it?\u201d<\/span><\/p>\n \u201cFourteen,\u201d Lassiter said.<\/span><\/p>\n \u201cFourteen million,\u201d Smucker replied. \u201cDo you think that\u2019s on par with what a for-profit would be receiving?\u201d The exchange underscored a broader theme running through the hearing: if nonprofit hospitals operate like corporations, lawmakers want to know why they\u2019re still treated differently in the tax code.<\/span><\/p>\n That question extended beyond compensation into how hospitals use their resources.<\/span><\/p>\n \u201c$718 million invested in publicly traded securities \u2026 $134 million gained by those securities?\u201d Smucker asked.<\/span><\/p>\n \u201cYes,\u201d Lassiter said.<\/span><\/p>\n \u201cSo can you explain to me why you should be granted nonprofit status?\u201d Smucker pressed, however, his time then expired. While hospital leaders later defended their \u201ccommunity benefit\u201d spending, lawmakers questioned whether the current standards are too vague to enforce.<\/span><\/p>\n \u201cNonprofit hospitals receive a significant tax benefit, and in return, we expect them to meet certain obligations,\u201d said Rep. Nicole Malliotakis (R-NY). \u201cHowever, those requirements are relatively broad and fall under the community benefits standard.\u201d<\/span><\/p>\n That lack of clarity drew further concern from Rep. Kevin Hern (R-OK), who questioned how regulators can even measure compliance. \u201cHow can the IRS determine if an individual facility is satisfying the community benefit standard?\u201d Hern asked.\u00a0<\/span><\/p>\n The hearing followed directly on the heels of a campaign launched by Consumers\u2019 Research, which has accused major nonprofit systems, particularly NewYork-Presbyterian and CommonSpirit Health \u2014 whose CEOs were both present \u2014 of drifting away from core patient care and toward political and ideological initiatives.<\/span><\/p>\n That campaign highlighted public statements from hospital leadership that critics argue reflect a broader institutional shift. Ray Dalio, a trustee of NewYork-Presbyterian, said the institution aims to advance \u201cequal healthcare and equal education,\u201d while CEO Dr. Steven J. Corwin emphasized that the hospital seeks to be \u201ca leader in health justice.\u201d<\/span><\/p>\n