The tax code requires hospitals to demonstrate “community benefit” to qualify for billions of dollars in tax breaks. On paper, that sounds like accountability. In practice, it’s a loophole. Hospitals can — and do — claim almost anything as a community benefit: wellness fairs, yoga classes, or promotional campaigns. What the law does not require is measurable charity care or relief for patients drowning in medical debt.

That gap is costing patients dearly.

The Numbers Don’t Lie: Billions in Subsidies, Minimal Patient Relief

Tax-exempt hospitals save billions in federal, state, and local taxes every year. Add to that the $66.3 billion in annual revenues from the 340B drug pricing program, and you have institutions awash in resources. Yet countless patients still can’t afford their prescriptions, are sent to collections for bills they cannot pay, or worse, file for bankruptcy. The very people these programs were supposed to help are being left behind while hospitals collect subsidies with little accountability.

This is the definition of virtue signaling: boasting about “community benefit” while communities themselves see few tangible results. Meanwhile, vital services — free care for the uninsured, debt relief for struggling families, access to lifesaving treatments — are underdelivered or ignored.

Patients Rising hears from individuals across the country who live this reality. In Virginia, a mother was hounded by a 340B hospital for medical debt while that same institution reported record profits. In Colorado, a patient with a rare disease was switched off her stable medication simply because it was cheaper — with devastating consequences for her health. In Illinois, families have been denied financial assistance at tax-exempt hospitals located in wealthy suburbs that nevertheless enjoy the same generous tax breaks as safety-net hospitals.

These aren’t isolated anecdotes. They’re part of a systemic pattern: hospitals maximizing revenue while patients absorb the risk. And it’s happening on a national scale. A Lown Institute report found that more than three-quarters of nonprofit hospitals spent less on charity care and community investment than they received in tax breaks. That’s not just a broken promise — it’s a redistribution of resources away from patients and toward institutions.

Four Ways to Hold Non-Profit Hospitals Accountable

Congress now has an opportunity to change course. This week, the House Oversight Subcommittee on Ways and Means held a hearing: “Virtue Signaling vs. Vital Services: Where Tax-Exempt Hospitals are Spending Your Tax Dollars.” That framing could not be more accurate — and Congress should use this moment to demand accountability.

Here’s where reform should begin:

1. Redefine “Community Benefit.” Tie it directly to charity care, medical debt relief, and expanded access for vulnerable patients — not vague activities that look good on paper but don’t help our most vulnerable patients.
2. Define 340B Patients and Mandate Transparency. Congress should set a clear definition of who qualifies as a 340B patient, require hospitals to disclose when patients are part of the program, and show how much money is being generated and reinvested back into care. Without this, patients remain in the dark while hospitals pocket the difference.
3. Link Tax Exemption to Results. If hospitals fail to deliver measurable benefits, they should not enjoy the same tax privileges as those that do.
4. Reward Real Impact. Hospitals that truly invest in patient care, financial assistance, and safety-net services should be elevated as models of integrity and rewarded for their commitment.

This isn’t about punishing hospitals. It’s about restoring fairness and trust. Families pay their taxes. Patients pay their premiums. Hospitals that claim nonprofit status must be held to the same standard of responsibility. If they are going to receive enormous public tax breaks, they must prove that patients are the ones who benefit.

The stakes are too high for Congress to settle for virtue signaling. Patients deserve policies that deliver vital services — care they can afford, relief from crushing debt, and access to the care they need. Anything less is a betrayal of the public trust.

The American taxpayer deserves better. And so do America’s patients.

Watch:Oversight Subcommittee Hearing: Where Tax-Exempt Hospitals are Spending Your Tax Dollars