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July 9, 2008 7:28:18 AM CDT

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Critics: Nonprofit Hospitals Unhealthily Rich

Posted Apr 4, 08 2:20 PM CDT in Business,  Science & Health    Editor's Choice

(Newser) – Nonprofit hospitals are making more money than for-profit hospitals, and that has many critics wondering why they get such sweet tax breaks, the Wall Street Journal reports. Seventy-seven percent of nonprofits are making money, with at least 25 pulling in more than $250 million a year. Many are spending that money on new facilities and executive pay, rather than charity care.

“Some nonprofit hospitals seem to forget that their operations are subsidized with generous tax breaks,” said Senator Charles Grassley. Chicago’s Northwestern Memorial, for example, pays its CEO $16.4 million but spends less on charity care than it gets in tax breaks. “Nonprofit is a misnomer—it's nontaxable,” said the president of a for-profit hospital that pays millions in taxes annually.

Source Wall Street Journal

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Senator Charles Grassley has threatened legislation forcing nonprofit hospitals to offer more charity care.   (AP Photo/Charlie Neibergall)
The emergency entrance at Northwestern Memorial Hospital in Chicago is seen on Friday, Nov. 16, 2007. Northwestern spends less on charity care than it receives in tax breaks.   (AP Photo/Charles Rex Arbogast)
The hospital industry represents a significant chunk of American health spending.   (Shutterstock)
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