Examining the Growing Disconnect Between Nonprofit Hospital Missions and Executive Pay

A new Tippinsights accountability report finds that New York-Presbyterian Hospital System directed 0.7% to 1% of revenue to charity care during the years examined, while its CEO's annual compensation rose from $8.9 million to more than $23 million. The system was also part of a $750 million settlement covering hundreds of sexual abuse claims by female patients, and reportedly laid off approximately 1,000 employees citing "financial challenges." The report examined some of the largest tax-exempt hospital systems in the United States.

The Compensation-to-Charity Gap

Tax-exempt hospital systems receive income tax exemption, property tax exemption, and federal awards on the premise that they serve a charitable mission. Tippinsights' report documents cases where the fiscal allocation diverges from that premise. Rush University Medical Center in Illinois received nearly $75 million in state funding since 2020, more than $194 million in federal awards, and held $167.8 million in overseas investments, while its CEO received more than $3.6 million in compensation plus a personal housing allowance and memberships at exclusive social clubs. The same system laid off employees in early 2024.

Fitch's Sector-Wide Snapshot

Fitch's nonprofit hospital dataset provides aggregate fiscal health metrics that contextualize individual system behavior. The median operating margin improved for a third consecutive year in 2025, reaching 1.5%. Sixty-seven percent of providers reported a positive margin, up from 64% the year before and roughly half in 2022. Personnel expenses fell to 52.6% of operating revenue in 2025, down from 53.5% in 2024. Senior director Kevin Holloran characterized the sector's state as an "unfinished recovery," with the 1.5% median margin remaining below every pre-pandemic data point in the firm's 20-year dataset. The One Big Beautiful Bill Act is expected to materially affect providers beginning in 2027, reducing Medicaid enrollment and restricting provider taxes and state-directed payments.

Audit Queries for the NYC Nonprofit Database

For analysts building profiles on tax-exempt hospital systems operating in New York City, the following data points apply:

• Charity care ratio: Charity care expenditure divided by total revenue. Flag any system below the 0.7%–1% benchmark identified in the Tippinsights report.
• Compensation trajectory: Year-over-year CEO compensation change relative to operating margin and staffing levels.
• Federal award concentration: Sum of federal awards across government programs. Cross-reference against overseas investment totals.
• State subsidy dependence: Document state funding flows and the conditions attached.
• Margin benchmark: 1.5% median operating margin and 52.6% personnel-expense ratio serve as fiscal health baselines against projected 2027 Medicaid policy effects.