Nonprofit Hospitals Owe Black Families More than Medical Debt

By Hazel Trice Edney

When a nonprofit hospital can afford a multimillion-dollar compensation package for its chief executive but sends a struggling patient to a debt collector over a few hundred dollars, it has lost sight of its charitable mission. When that institution also enjoys tax exemptions subsidized by the community, it has betrayed the public’s trust.

Congress must keep pressing hospital executives to explain how their financial decisions serve the people underwriting those privileges. For Black Americans, who face both greater exposure to medical debt and far less accumulated wealth to absorb it, the answer carries consequences that can last for generations.

The Federal Reserve’s latest Survey of Consumer Finances offers a sobering picture. Between 2022 and 2025, median net worth for Black families fell 25 percent, from $49,100 to $36,800 while White families’ median net worth rose 6 percent, from $311,900 to $332,100. Those figures, expressed in 2025 dollars, leave White families with roughly nine times the median wealth of Black families.

These numbers, which include home equity and retirement assets, reveal how unequally families are positioned when an unexpected hospital bill arrives. A deductible that one household can cover without much disruption may force another to borrow, empty its savings, or fall behind on rent.

For generations, Black families have worked to overcome barriers to homeownership and financial security. Money diverted to an unaffordable medical bill cannot also become a down payment, just like a retirement withdrawal sacrifices future growth and a parent paying off hospital debt has less funding available to help a child through college. The cost of medical bills in the Black community, in other words, can reach well beyond the person who received treatment.

That unequal burden is documented. A Peterson-KFF Health System Tracker analysis of 2021 federal data found that 13 percent of Black adults owed more than $250 in medical debt, compared with 8 percent of White adults. These are debts that can linger after a patient has recovered, demanding money already needed for everyday necessities.

Against these sobering realities, the financial priorities of wealthy nonprofit hospital systems deserve far more scrutiny.

Nonprofit hospitals are legally permitted to earn a surplus, since responsible reserves and investment in patient care are essential. The betrayal occurs, however, when an institution treats accumulating wealth and rewarding executives as urgent priorities while treating assistance for struggling patients as an expense to minimize.

The House Ways and Means Committee’s May account of its hearing with health system CEOs illustrates the scale involved. Lawmakers questioned CommonSpirit’s leadership about $718 million invested in publicly traded securities and $134 million in investment gains. The committee also highlighted compensation packages of $21 million for a former CEO and $14 million for the current CEO. Those figures are astonishing for charitable non-profits.

An institution reporting tens of millions in investment gains or spending millions on executive compensation should have to explain every policy that pushes a financially vulnerable patient toward collections.

A 2022 KHN investigation of 528 hospitals found widespread policies allowing lawsuits and other aggressive collection practices. It also found that financial assistance was often difficult to locate or obtain. The investigation described patients eligible for help who nevertheless faced bill collectors.

A hospital cannot fulfill its charitable responsibility by posting an application that a sick person cannot find, understand, or complete. Assistance must reach eligible patients before a bill becomes a financial crisis.

Federal rules already require tax-exempt hospitals to make reasonable efforts to determine financial-assistance eligibility before taking extraordinary collection actions. Congress should demand rigorous enforcement and strengthen protections so that eligible patients receive assistance before their accounts go to collectors.

Lawmakers should also establish meaningful minimum requirements for community benefits, including a clear floor for free and discounted care. Those standards should reflect local need and a hospital’s financial capacity. While essential safety-net institutions deserve support, wealthy systems should face obligations proportionate to the tax advantages they receive.

Congress should also insist on accurate, usable prices and meaningful enforcement when hospitals fail to disclose them. Patients planning care deserve a chance to understand their likely costs, and purchasers need information to challenge excessive charges. Transparency must be paired with financial assistance because knowing a price does not make it affordable, especially in an emergency.

For too long, the healthcare affordability debate has allowed hospital billing practices to escape the scrutiny directed at insurers and drug companies. Every institution contributing to unaffordable care should answer for its conduct.

Black families should have the opportunity to recover from illness and continue building a future. Taxpayers should expect hospitals enjoying charitable exemptions to help protect that opportunity, and Congress must require these institutions to behave like real charitable nonprofits, rather than organizations whose most dependable public benefit is their own exemption from taxes.