When the University of Miami Health System “went viral” on social media, it was for all the wrong reasons. A hospital executive posted a video celebrating their newly remodeled 16,000-square-foot lobby as the “definition of FIRST CLASS.” The post showed off marble floors, a grand piano, and a massive digital screen for abstract art. One commenter said it looked like an Apple store. However, as many were quick to point out, the hospital gets government funding and is tax-exempt, meaning taxpayers subsidized the grandiose remodel.
The University of Miami hospital is a textbook example of how taxpayer-support for healthcare programs is misused and abused. While millions of Americans struggle to afford basic health care, subsidized nonprofit hospitals spend critical resources on their own version of Lifestyles of the Rich and Famous. The lobby rebuild is just one piece of the University of Miami Health System’s extravagance. The non-profit pays some executives multi-million dollar salaries, and it even spent big on a fancy expansion in Abu Dhabi!
Hospitals like the one at University of Miami are subsidized in all kinds of ways by taxpayers. They get government grants, bill Medicare and Medicaid, and benefit from tax exempt status. They also rake in millions from lesser-known programs, like federal 340B drug purchasing.
The 340B program was created in 1992 to restore drug discounts for Medicaid providers, but an expansion during the Obama Administration has made it a source of windfall profits for big hospitals. With no requirement to pass savings on to patients or their insurers, hospitals can opt for more expensive drugs and reap bigger profits. At the University of Miami hospital, the subsidies and profits pay for lavish lobbies, facilities in Abu Dhabi, and massive salaries.
Meanwhile, the consequences of misguided healthcare priorities are not just wasted funds; they can be harmful for patients. The University of Miami used to run the second largest organ transplant center in the nation. But after “years of unsafe practices, poor training, chronic underperformance, understaffing, and paperwork errors,” the U.S. Department of Health and Human Services (HHS) is in the process of shutting it down. In one case, a clerical error left a donated heart unused. HHS Secretary Robert F. Kennedy noted that the transplant center’s failings were “directly tied to patient harm.”
Americans spend almost twice as much per person on healthcare compared to other wealthy nations, and costs continue to rise faster than inflation. This drives up health insurance premiums, which Obamacare further subsidized, allowing hospitals to raise prices even more. For many American families and small businesses, this is the affordability crisis. And yet spending on “healthcare” turns out to include overseas clinics, luxury lobbies, and big paydays. Hospitals should never take working Americans’ tax dollars, use them on luxuries, then fail at the basics.
In its most recent available nonprofit filing, the University of Miami reported nearly $700 million in direct government grants. That doesn’t include the benefit of being tax exempt or reaping windfall profits from programs like 340B. In all, it reported more than $2.5 billion in healthcare revenues. The hospital CEO and a department chairman were each paid more than $4 million in one year.
Hospitals claiming to be nonprofits, and accepting taxpayer subsidies and other government benefits, have a duty to focus spending on real healthcare. They should stretch their dollars, just like tax paying American families do every day. The Department of Government Efficiency shined a light on waste in government. Now revelations of welfare fraud in states like Minnesota and California suggest that tens of billions of dollars—or more—have been stolen from honest, working Americans.
It’s time for transparency with accountability. Congress, the Administration, and state governments should take a hard look at how tax-exempt hospitals (and other subsidized institutions, like universities) spend their resources. Americans deserve hospitals that put patients first and don’t treat taxpayers as their own personal piggybank for pet projects.
The University of Miami Health System, with its luxurious facilities and failing organ transplant center, offers one answer to the question: Why is healthcare so expensive? It is a cautionary tale for everyone who cares about the future of American healthcare.
Trent England is the executive director of Save Our States.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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