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:
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 cash reserves. So while they aren’t “distributing profits,” many nonprofit hospitals still operate like big corporations. They just spend the money differently.
Over the past two decades, many small, independent hospitals have been bought up by large systems. Here are the largest nonprofit hospital operators in California:
CommonSpirit (Dignity Health): 32 Nonprofit Hospitals
Sutter Health: 24 Nonprofit Hospitals
Providence Health: 16 Nonprofit Hospitals
Kaiser Permanente: 15 Nonprofit Hospitals
Combined, these systems control over 100 hospitals in California — shaping care for millions of people.
Even without shareholders, nonprofit hospitals still spend millions on executive compensation. Based on 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. 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. While some are paid well, others are seeing stagnant wages. Essential staff — CNAs, housekeepers, techs — often make close to minimum wage while doing the hardest, most physically demanding work.
These workers experience:
High turnover
Understaffing
Burnout and exhaustion
Minimal appreciation or recognition
Let’s look at two systems’ recent financial performance:
Sutter Health
2023 Net Income: $1.17 billion
2024 Operating Income: $142 million
Patients Served: 3.5 million
CommonSpirit / Dignity Health
2024 California Region Revenue: $13.2 billion
System-wide Total: $37.5 billion
These hospitals don’t pay federal taxes, yet their financial priorities often mirror for-profit corporations: growth, efficiency, and image — sometimes at the expense of care and access.
Critics argue that nonprofit hospitals use their status to avoid taxes while behaving like for-profit corporations. Consider:
CEO pay rivaling Fortune 500 companies
Aggressive billing and collections practices
Luxury facility expansions while charity care remains limited
Management bonuses tied to early patient discharges
I’m not writing this to tear hospitals down. But if we’re going to improve our healthcare system, 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?
In Part 2, we’ll look deeper at:
The real impact on patients and staff
Charity care vs. medical debt
How financial priorities are shaping healthcare outcomes
Stay Tuned for Part 2: “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.
Be sure to follow artofbeingill.com for more reflections and resources. For personal questions or collaborations, reach out at artofbeingill@gmail.com.
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