Institutions like New York-Presbyterian and Memorial Sloan Kettering Cancer Center continue to drive up health care costs for families and employers while hiding behind their tax-exempt status and public reputations as charitable institutions. Behind the scenes, these so-called nonprofits behave more like big businesses—demanding excessive rate hikes, spending millions on executive pay and advertising, suing low-income patients, and evading federal transparency rules.
Let’s start with the numbers.
New York-Presbyterian demands commercial insurance rates that far exceed Medicare’s, with some services billed at more than 10 times what the federal program pays. The hospital has also sued over 2,000 patients for unpaid bills in recent years and placed dozens of liens on patients’ homes—all while collecting more than $130 million in charitable donations and reporting over $498,721,775 in net revenue in 2023.
And despite its nonprofit status, New York-Presbyterian compensated its CEO over $9,000,000, placing him among the highest-paid “nonprofit” hospital executives in the entire country.
That same year, the hospital spent over $93.5 million on advertising and promotion—more than some Fortune 500 companies spend on national campaigns. This is not charity; it’s corporatized medicine with a tax break.
Memorial Sloan Kettering (MSK) recently reached an undisclosed resolution with one big insurance company after months of contentious negotiations. But their original demands tell the story: a 30% price hike across the board—including a 36% increase at its flagship hospital—that would have driven up health care costs for New Yorkers by more than $400 million. The proposed increases would have cost employers millions and pushed services like colonoscopies to more than $14,000. MSK is already among the most expensive cancer centers in the country—charging 175% more than its peers for some services—and its outpatient costs were on track to rise nearly 50% under its proposed contract.
It is still unclear how much insurance costs will rise as a result of MSK’s recent negotiation, but take it to the bank that it will mean increased costs for New York employers and patients.
The irony? These hospitals enjoy the generous benefits of being “nonprofit” institutions. They pay no federal, state, or local income taxes. They receive billions in state subsidies and hundreds of millions in private donations. And yet, they provide shockingly little in the way of genuine charitable care. Many spend less on charity care than the value of the tax breaks they receive—a “fair share deficit” that reached $274 million in New York-Presbyterian’s case in 2023, according to the Lown Institute Hospitals Index.
And when the public dares to ask where all the money is going, these institutions refuse to comply with federal price transparency rules. A recent review found that 34 out of 37 New York City and Long Island hospitals—including New York-Presbyterian and MSK—were not compliant with federal law requiring them to post transparent pricing for services.
According to a report in the Economist, “The problem is compounded by the opacity of hospital pricing. The cost of procedures varies widely across hospitals: a study in 2023 by KFF, a health-policy think-tank, found that the sticker price of a colonoscopy in the Atlanta area ranged from $435 to over $7,000. But the complexity of medical billing and the nuances of reimbursement often make it difficult to compare services effectively.”
Meanwhile, the hospitals invest heavily in politics and lobbying to maintain their stranglehold on the system. The Greater New York Hospital Association, which represents many of these institutions, is among the state’s most powerful lobbying groups — spending nearly $10 million between 2017 and 2022 and making seven-figure contributions to state political parties. Their efforts helped secure a broad increase in Medicaid reimbursement rates, costing taxpayers an estimated $140 million a year.
This is not just an abstract policy issue. These practices hit New Yorkers directly in their wallets. Employers must cut benefits or raise premiums to cover rising costs. Families delay care or go into debt to afford treatment. And all the while, these hospital systems grow richer, more powerful, and more immune to scrutiny.
It’s time for policymakers, media, and the public to stop giving these institutions a free pass simply because they wear the “nonprofit” label. If hospitals want to be treated like charities, they need to act like it—by complying with transparency laws, prioritizing patient care over profits, and using their tax-exempt status to serve their communities, not enrich their executives.
Until then, the fundamental drivers of New York’s health care crisis will remain hidden in plain sight—operating under prestigious names, cloaked in benevolence, but contributing to a broken healthcare system that grows more unaffordable by the day.
Peter J. Pitts is President of the New York-based Center for Medicine in the Public Interest
