North Carolina Hospital Systems Enjoyed Record Profits During Pandemic Transferring More Wealth from Citizens to Themselves

https://www.nctreasurer.gov/news/press-releases/2022/06/15/north-carolina-
hospital-systems-enjoyed-record-profits-during-pandemic-transferring-more-
wealth

Raleigh, N.C.
Taxpayer-funded COVID relief gave a huge wealth transfer to wealthy 
hospital systems. Even as they complained of financial losses, wealthy 
hospital systems enjoyed record profits and a massive $7.1 billion growth 
in cash and investments during the pandemic. These systems boasted huge 
reserves, but they still took the bulk of the relief funds meant for 
struggling hospitals — and then failed to dedicate more than a fraction of 
their windfall to increasing charity care for their suffering patients.

State Treasurer Dale R. Folwell, CPA, is calling on these hospital systems 
to use their massive profits to lower costs for patients and to increase 
charity care to a level equal to or above their lucrative tax breaks — or 
to return the unnecessary, taxpayer-funded relief. He joins with other 
experts who fear that the disproportionate distribution of COVID relief 
dollars will fuel steep hospital price inflation and consolidation.

Those and other findings are included in a new, peer-reviewed report on 
hospital pandemic profitability that the Treasurer released on Wednesday, 
June 22, at a press conference at which he was joined by lawmakers, 
researchers and independent doctors. The report found that the state’s 
foremost hospital systems enjoyed a significant growth in cash and 
investments during the pandemic, while publicly claiming they were 
battling big hits to their budgets.

The report concluded that the seven large hospital systems recorded $5.2 
billion in net profits in 2021, along with the $7.1 billion growth in cash 
and investments from 2019 to 2021 — almost as much as the state 
appropriated for K-12 classroom instruction in 2020. While six of the 
hospitals boasted record net profits, Duke Health outpaced them all with a 
41% net profit in 2021, a profit margin higher than tobacco and investment 
banking.

These hospital systems recorded those profits after taking $1.5 billion in 
taxpayer-funded COVID relief, as well as another $1.6 billion in Medicare 
Accelerated and Advance Payments. It is unclear why the large systems 
needed the relief. Atrium Health alone was sitting on $7 billion in cash 
and investments. Most systems had enough cash on hand to operate for more 
than half a year without any incoming revenue — or even 10 times as long 
as many rural hospitals. Treasurer Folwell said the research results were 
unsettling.

“Some things are worth getting mad about. The hospital cartel is using 
taxpayer dollars to help crush the middle class and rob lower-income 
families of upward mobility," Treasurer Folwell said. “Wealthy hospitals 
took billions of taxpayer dollars meant to protect struggling hospitals — 
and then some billed poor families or even sued patients.”

Charity care spending fell across a third of hospitals in 2020 as people 
struggled with economic lockdowns, job losses and the spread of the 
coronavirus. Yet hospital executives advocated for forgiveness of relief 
loans and are pushing for still more taxpayer money, while hospital 
lobbyists deflect attention away from the mushrooming investment growth.

Despite evidence in the report to the contrary, the North Carolina 
Healthcare Association representing hospitals argued that criticizing 
hospitals for billing poor patients during the pandemic was “potentially 
dangerous,” writing that “hospitals are now spending needed reserves to 
fight the virus.”

“While health care workers suffered on the front lines, hospital 
executives made billions on Wall Street,” said Treasurer Folwell. “None of 
these nonprofit systems pay any property, income or sales taxes. Many 
failed to fully honor their charitable mission even when thousands of 
North Carolinians lost their businesses and their jobs during the 
pandemic.

“NASHP analysis has found that many health systems are in more prosperous 
positions now than before the pandemic,” said Marilyn Bartlett, CPA, 
senior policy fellow at the National Academy for State Health Policy. 
“Having access to and analyzing data to understand hospital charges, 
prices, costs, investments, and liabilities is critical.”

“The federal government channeled taxpayers’ money to profitable and 
powerful hospitals, which did not need the money in the first place,” Bai 
said. “These hospitals use these windfall profits to strengthen market 
power, so that they can squeeze higher prices from private payers and 
lobby for more government handouts. American taxpayers are hit by a double 
whammy.”

Treasurer Folwell is calling on hospital systems to either return the 
taxpayer dollars or to commit to reducing hospital price inflation. He 
supports the Medical Debt De-Weaponization Act to strengthen 
accountability, transparency and consumer protections on medical debt. 
Although they claim their charitable care is closely scrutinized by 
regulators, the truth is nonprofit hospitals currently face little 
oversight or accountability from the federal or state governments for 
their community benefits.

“Hospital executives made record profits off of the backs of sick people 
during the pandemic and decades before,” said Treasurer Folwell. “We have 
a duty to make health care affordable for North Carolina families. We have 
a duty to hold hospital executives accountable for wrecking the financial 
health of thousands of patients and transferring wealth from citizens to 
them.”

KEY TAKEAWAYS:

After taking taxpayer-funded COVID relief dollars, North Carolina’s seven 
large hospital systems reaped $7.1 billion of growth in cash and financial 
investments from 2019 to 2021.
They recorded $5.2 billion in net profits in 2021, when six hospital 
systems enjoyed higher net profits than in the years before the pandemic.
Duke Health made a 41% net profit margin of $1.8 billion in 2021. Its net 
profit margin was 11% in 2019.
Atrium Health took the most taxpayer relief dollars, collecting $589 
million in COVID relief and another $438 million in Medicare advance 
payments. Atrium Health then made a $1.7 billion net profit after its 
merger with Wake Forest Baptist Health in 2021.  
Seven systems took $1.5 billion in taxpayer-funded coronavirus relief 
meant for struggling hospitals, as well as another $1.6 billion in 
Medicare Accelerated and Advance Payments from 2020-2021.
These systems had vast resources compared to rural hospitals and 
independent physicians. Most had enough cash on hand to operate for more 
than half a year without any incoming revenue, as well as billions of 
dollars in cash and financial investments. 
In contrast, many rural hospitals lacked the cash on hand to operate for a 
month before shutting their doors.
The dominant hospital systems did not share their profits with 
disadvantaged patients.
Charity care spending fell across a third of 104 hospitals in 2020.
Across 104 hospitals, charity care spending rose only $246.5 million from 
2019 to 2020 — an increase that equals less than 8% of the seven systems’ 
$3.1 billion growth in cash and investments that year.
Some hospitals increased billing of poor patients eligible for charity 
care, while Atrium Health sued hundreds of patients.
There is little accountability at the state or federal levels for 
nonprofit hospitals’ tax exemptions or community benefits.
North Carolina does not require a minimum threshold for charity care 
spending.
The Internal Revenue Service cannot prove that it is consistently 
reviewing hospitals’ community benefits.
Unless state lawmakers take action, the profits gained from the 
misdirection of taxpayer dollars are expected to fuel record levels of 
consolidation and price increases.
The SHP, a division of the N.C. Department of State Treasurer, provides 
health care coverage to nearly 750,000 teachers, current and former 
lawmakers, state university and community college personnel, active and 
retired state employees and their dependents. It is the largest purchaser 
of health care and prescription drugs in North Carolina. For more 
information, visit the SHP website.


-- 
November 5, 2024 - Congratulations President Donald Trump.  We look 
forward to America being great again.

We live in a time where intelligent people are being silenced so that 
stupid people won't be offended.

Every day is an IQ test. Some pass, some, not so much.

Thank you for cleaning up the disasters of the 2008-2017, 2020-2024 Obama 
/ Biden / Harris fiascos, President Trump.

Under Barack Obama's leadership, the United States of America became the 
The World According To Garp.  Obama sold out heterosexuals for Hollywood 
queer liberal democrat donors.