Americans need to understand what’s behind the business of healthcare. Right now, most do not. For many, it remains a mystery. Even some physicians struggle to fully grasp it, as their focus is rightly on caring for patients—not navigating the business side of medicine.
But what patients know can give them power.
Your healthcare provider delivers care in return for a fee. That fee is ultimately paid by you—typically through your insurance carrier, whether public or private. However, one of the biggest factors influencing that cost is where you seek care. Location impacts pricing, transparency, and whether the cost actually reflects the level of care you receive.
Insurance companies are not in the business of providing care. They are in the business of managing claims—and often denying them—to generate profit.
Consider where you go: a community hospital versus a VA medical center. There are meaningful differences.
Even community hospitals, often marketed as “non-profit,” are actually private non-profit entities in the eyes of the IRS, operating under 501(c)(3) status. This allows them to avoid paying taxes, provided they meet certain requirements:
- Conducting Community Needs Assessments
- Reinvesting in their organization
- Maintaining Charity Care or Financial Assistance Policies
- Providing care to indigent populations under EMTALA
But let’s be clear: non-profit does not mean “no profit.”
These organizations absolutely pursue profit—referred to as margin. This is the revenue remaining after expenses are paid. While that margin is often described as “laser thin” (typically 1% to 4%), the scale matters. When organizations are generating billions in charges and billions in net revenue, even small percentages become very large numbers.
Americans should understand not only what they are being charged—but also how that money is distributed.
That includes executive compensation.
Medical care is undeniably expensive. But if even a single dollar is put back into the system more effectively, we all benefit.
If you want to start learning, it’s simple:
- Google your local non-profit healthcare organization along with the term “990 Form”
- Review their publicly available financials
- Study their highest compensated employees
- Look at their spending on travel nurses
- Then ask yourself: Is this fair?
Some executives take modest salaries. Others extract millions from their organizations and communities.
And don’t assume those roles couldn’t be filled by someone equally capable at a fraction of the cost.
Americans need to ask harder questions.
They need to examine the value of executives—the “suits”—who are extracting millions from the very fees generated by doctors, nurses, and allied health professionals delivering care every day.
