Nonprofits, which account for a majority of U.S. hospitals, are faring even better than their for-profit counterparts: 77 percent of the 2,033 U.S. nonprofit hospitals are in the black, while just 61 percent of for-profit hospitals are profitable, according to the AHD data.How do they do it? By avoiding their historic responsibility to provide charity care:
In 2006, Northwestern Memorial spent $20.8 million on charity care — less than 2 percent of its revenues and a fraction of what it received in tax breaks.... In 2006, Northwestern Memorial's former chief executive officer, Gary Mecklenburg, received a $16.4 million payout....and by making tax free investments:
Untaxed investment gains have greatly increased some hospitals' cash piles. Ascension Health reported net income of $1.2 billion in its fiscal year ended June 30, 2007, and cash and investments of $7.4 billion. That's more cash than Walt Disney Co. has.