I’ve worked in healthcare for decades — in massive hospitals with over a thousand beds and in tiny rural ones with barely twenty.
I’ve worked in healthcare for decades — in massive hospitals with over a thousand beds and in tiny rural ones with barely twenty. Across every role, in every facility, one question has followed me:
Where does all the money go?
Hospitals often strive to provide good care — and many do. But when healthcare systems start buying up multiple hospitals, some owning 10, 15, even 30 or more, it’s fair to ask: If these organizations bring in billions of dollars in revenue, why isn’t more of that money going to patients, frontline workers, or community care?
That’s what this blog series is about: looking behind the curtain of “nonprofit” hospitals to understand how they operate — and who truly benefits from the money flowing through them.
Many people assume that “nonprofit” means an organization isn’t driven by money. That it puts community before profit. That it exists to serve, not to grow.
But in healthcare, the term nonprofit mainly refers to tax status, not values.
Most nonprofit hospitals:
Are exempt from federal income tax
Have no shareholders or private investors
Are required to reinvest surplus revenue into their mission
That surplus — also known as net income — often goes to:
Executive salaries and bonuses
Hospital expansion projects
Marketing and branding
Cash reserves
So while they aren’t “distributing profits,” many nonprofit hospitals still operate like big corporations. They just spend the money differently.
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Over the past two decades, many small, independent hospitals have been bought up by large systems. Let’s take a look at the largest nonprofit hospital operators in California:
CommonSpirit (Dignity Health) – 32 Nonprofit
Sutter Health – 24Nonprofit
Providence Health – 16 Nonprofit
Kaiser Permanente – 15 Nonprofit.
Combined, these systems control over 100 hospitals in California — shaping care for millions of people.
And I’ve worked for several of them.
To be respectful, I won’t detail every frustration I’ve experienced inside these systems. But I will say this: the patient is not always the priority, and that’s deeply troubling.
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Even without shareholders, nonprofit hospitals still spend millions on executive compensation.
Here are just a few examples from recent IRS tax filings:
- Sutter Health CEO: Up to $13 million/year
- CommonSpirit executives: Multiple 7-figure salaries
- Kaiser Permanente CEO: $16.1 million in 2021
- Hospitals argue this pay is necessary to attract top talent to manage complex systems. But it raises an ethical question: If a hospital exists to serve the community, is it justifiable to pay its CEO more than 100 times what a nurse or a CNA earns?
Nurses often work long shifts under intense pressure — and while some are paid well, others are seeing stagnant wages or declining pay, especially new grads.
And what about the workers who clean patient rooms, disinfect surgical units, or turn patients in bed? Many of these essential staff — CNAs, housekeepers, techs — make close to minimum wage while doing some of the hardest, most physically demanding work in the hospital.
These workers experience:
High turnover
Understaffing
Burnout and exhaustion
Minimal appreciation or recognition
Without them, hospitals can’t function. And yet, they’re among the lowest paid.
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Let’s look at just two systems’ recent financial performance:
Sutter Health
2023 Net Income: $1.17 billion
2024 Operating Income: $142 million
Patients Served: 3.5 million (up 100,000 from the prior year)
CommonSpirit / Dignity Health
2024 California Region Revenue: $13.2 billion
System-wide Total: $37.5 billion
These hospitals don’t pay federal taxes. They have no investors to satisfy. And yet, their financial priorities often mirror those of for-profit corporations: growth, efficiency, and image — sometimes at the expense of care, staffing, and access.
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Aggressive billing and collections practices
Luxury facility expansions while charity care remains limited
Management bonuses tied to early patient discharges or reduced supply use
Yes, these practices are legal. But are they ethical? Do they align with mission statements that claim to “put the patient first”?
Or are we simply watching a business model disguised as charity?
I’m not writing this to tear hospitals down. I know many people in healthcare care deeply and do the best they can with limited resources.
But if we’re going to improve our healthcare system — and protect our most vulnerable patients — we need to ask hard questions:
Where is the money going?
Why are essential staff underpaid while executives thrive?
Why do patients face crushing medical bills at “nonprofit” hospitals?
And what do we actually expect from an organization that claims to be mission-driven?
The real impact on patients and staff
Charity care vs. medical debt
How financial priorities are shaping healthcare outcomes
And what you can do to demand transparency and accountability
Because when it comes to healthcare, profit vs. purpose isn’t just a financial issue — it’s a human one.
Here’s something ironic I’ve seen too often:
No one checks on constipation until discharge day.
Why?
- Rehab facilities won’t accept patients who haven’t had a bowel movement in 2+ days.
- Suddenly, nurses are expected to “get results” fast.
It becomes a scramble—and it’s not fair to the patient.
Behind the Bill: How Nonprofit Hospitals Spend (and Don’t Spend) Their Surpluses” — coming soon.
As always thanks for being here, it really means a lot. One small voice or share means the difference for many.
I’d love to hear your thoughts—feel free to leave a comment, like, and share with friends who might relate.
Be sure to follow artofbeingill.com for more reflections and resources.
For personal questions or collaborations, reach out at artofbeingill@gmail.com.
Printable hospital prep guides will be available soon:
- What to ask about your medications
- Bowel regimens and laxatives
- Discharge checklists
- What to expect each day in the hospital
Stay tuned. And thank you for being here.
Please post comments, like and share to friends and come back for more.
For personal questions contact me at artofbeingill@gmail.com
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In Part 1, we looked at how California’s largest nonprofit hospital systems bring in billions in revenue — all while paying their top executives millions of dollars per year.
Now, let’s take a closer look at where those dollars aren’t going: to frontline staff, struggling patients, or the communities these hospitals claim to serve.
At Art of Being ILL, this series isn’t about blame. It’s about conversation, education, and shining light on the things we often take for granted in healthcare. I’m not pointing fingers — I’m just inviting dialogue.
The pay gap between hospital executives and staff is hard to ignore — especially at nonprofit institutions.
While CEOs at systems like Sutter Health and Cedars-Sinai earn $5 to $13 million per year, the people delivering direct care — nurses, aides, technicians — often face:
Wage stagnation
Short-staffing and burnout
Unsafe patient loads
Increased turnover and reliance on expensive travel nurses
Hospital systems argue that high executive pay is necessary to attract experienced leaders. But if the mission is truly service, shouldn’t competitive wages for frontline caregivers come first?
By law, nonprofit hospitals are required to offer community benefit — including free or reduced-cost care for low-income patients.
Some do better than others. For example:
Cedars-Sinai expanded its charity care in 2020 to include patients earning up to 400% of the federal poverty level, with discounts up to 600%.
But many other systems:
Spend less than 2% of their revenue on charity care
Use aggressive billing and collection tactics
Send unpaid bills to collections — or even sue patients
For tax-exempt institutions, it’s hard to reconcile these practices with a mission of community health.
Let’s follow the surplus:
Sutter Health (2023–2024)
2023 Net Income: $1.17 billion
Investments: Facility upgrades, tech, expanding care access
Dignity Health / Common Spirit
2024 California Region Revenue: $13.2 billion
Reported increases in provider fee revenue and admissions
Spending focus: Capital improvements, system growth
Most nonprofit systems justify these surpluses by pointing to:
Renovating buildings
Launching surgical centers or specialty wings
Building financial reserves for future downturns
But what’s often missing from those justifications is:
Investments in underpaid frontline staff
Expanding meaningful charity care
Funding programs that actually reach underserved communities
These financial choices have real human impact:
Burned-out nurses are leaving the profession in record numbers
Patients delay care or rack up crippling debt
Communities miss out on programs like mobile clinics, housing partnerships, or mental health services
A billion-dollar surplus might renovate a hospital’s lobby. Or it could fund hundreds of community health workers.
Where the money goes — matters.
Transparency is power. Here’s how to take action:
Look up your local hospital’s IRS 990 filing
ProPublica Nonprofit Explorer Search by hospital or system name Focus on executive pay, charity care, and community benefit sections
Ask the right questions:
How much of the hospital’s revenue goes to charity care?
What’s the CEO paid — and how does that compare to staff wages?
What specific programs are supporting your community?
Support policy reform:
Some states (like Oregon and Illinois) require minimum community benefit spending
Advocate for stronger state oversight and reporting rules.
Nonprofit hospitals don’t have shareholders — but they do have choices. And those choices affect patients, staff, and public trust.
If these institutions want to maintain tax exemptions and moral authority, they must prove that their surpluses are being used in service of people, not profit margins.
Because healthcare should be about healing — not hoarding.
As always thanks for being here, it really means a lot. One small voice or share means the difference for many.
I’d love to hear your thoughts—feel free to leave a comment, like, and share with friends who might relate.
Be sure to follow artofbeingill.com for more reflections and resources.
For personal questions or collaborations, reach out at artofbeingill@gmail.com.
