For Virginia King, a metastatic breast most cancers affected person, the “nonprofit” mission of her native hospital felt like a hole promise when she acquired a invoice for $22,700 for a drug with a listing worth of simply $2,700. In Pennsylvania, residents watching the Tremendous Bowl final February noticed $8 million commercials for elite medical facilities, whereas in New Mexico, a $100 million unbiased clinic was pressured to shutter its doorways after a bitter dispute with a dominant hospital system.
These tales have gotten the face of a rising nationwide outcry. Whereas greater than 2,900 U.S. hospitals maintain tax-exempt standing as nonprofits, critics argue they’ve undergone a “mission drift,” prioritizing aggressive enlargement, lavish advertising, and high-margin earnings over the charity care that justifies their tax breaks.
For instance, “nonprofit” NYU Langone confronted criticism in 2025 for purchasing a Tremendous Bowl advert whereas paying no federal revenue taxes.
On the heart of the talk is a safety-net program for hospitals serving low-income sufferers known as the 340B drug low cost program. It requires drugmakers to offer steep reductions on outpatient medicine, with the mission of liberating up sources for nonprofits to offer extra care.
Nevertheless, for the reason that Medicaid enlargement underneath the Reasonably priced Care Act, this system has exploded. At this time, greater than 2,700 hospitals take part, together with world-renowned establishments like Cedars-Sinai and the Cleveland Clinic. A 2025 report from the Congressional Funds Workplace confirmed what many suspected: this system now incentivizes hospitals to amass unbiased clinics and prescribe higher-cost medicine to seize bigger revenue margins.
“Anybody who says 340B is cost-neutral to the taxpayer, isn’t paying consideration,” Sen. Invoice Cassidy, R-La., stated throughout a Senate committee listening to into this system. “Because the 340B program grows, so do healthcare prices.”
The first justification for a hospital’s tax-exempt standing is “charity care” — free or discounted providers for these in want. Whereas some methods have elevated this spending, critics say it hasn’t saved tempo with their income.
A September 2025 Home Methods and Means report discovered that nonprofit hospitals obtain $37 billion in annual tax advantages, but their group profit spending falls brief by greater than $25 billion relative to these tax breaks.
When NYU Langone dropped $8 million on a Tremendous Bowl LIX advert, Rep. Greg Murphy, R-N.C., questioned why a tax-exempt entity was spending “exorbitant quantities” on nationwide branding somewhat than native care.
The tide might lastly be handing over Washington. In late 2025, the 340B ACCESS Act was launched within the Home to ascertain a transparent statutory definition of an “eligible affected person” and be sure that reductions truly attain the susceptible.
For sufferers like Virginia King, whose $22,700 invoice was known as a “misunderstanding” after media inquiries, reform can’t come quickly sufficient.
