EXCLUSIVE: Massive Misspending Uncovered In Nonprofit Hospitals Across Texas, New Report Shows

A conservative watchdog group released new research Monday alleging widespread fraud, waste and abuse of funding from three tax-exempt healthcare systems across Texas, the Daily Caller News Foundation first learned.

Policy nonprofit Save Our States published its new findings alongside its advertisement on YouTube — both first exclusively shared with the DCNF — highlighting the most egregious findings alleging gross misspending. This comes months after the group published a comprehensive report on extensive spending misconduct in nonprofit hospitals across eight states in June.

“Taxpayers shouldn’t be forced to foot the bill of nonprofit hospitals that act more like big businesses than community charities,” Save Our States Executive Director Trent England said in an exclusive statement to the DCNF. “Giant hospital systems get millions from government programs and tax breaks, then lavishly spend on executive perks, foreign investments, luxurious art collections, and flashy sponsorship deals.”

“Subsidies and tax benefits are supposed to help Texas patients, not bankroll executive perks and other extravagance,” England added. “Lawmakers must take a closer look at these nonprofit hospitals that have strayed far from their charitable mission.”

This is the first time Save Our States has featured Texas’ healthcare systems in an accountability report. The group’s ad spotlights several nonprofit healthcare systems with a history of horrendous squandering.

Memorial Hermann Health System — one of the largest nonprofit hospital networks in Southeast Texas — takes millions from federal programs to pay dozens of executives seven-figure salaries and make billions in foreign investments and sports-team sponsorships, the report’s analysis of the organization’s 990 form found.

Memorial Hermann operates 17 hospitals, over 280 care sites, and employs more than 35,000 people across the Greater Houston area. Memorial Hermann’s CEO and President David L. Callender received $6,061,094 in its most recent tax year and paid hospital executives Erin Asprec, Alec King, James McCarthy, and Josh Urban between $2 and $3 million annually, Save Our States’ report found. Twenty-one other Memorial Hermann executives received between $1 and $2 million in total compensation, tax forms show.

Memorial Hermann also boasts billions in foreign investments across the globe including $666,000,000 in Central America and the Caribbean; $315,000 in Europe; $42,000,000 in North America (Canada and/or Mexico); $24,000,000 in East Asia and the Pacific, and other areas, the report finds.

The report also draws scrutiny to Memorial Hermann’s partnership with the NBA’s Houston Rockets as the team’s official healthcare provider since 2005.