In a recent court case that has made national news, a Pennsylvania court found that Tower Health could no longer receive property tax breaks for four local hospitals: Pottstown Hospital, Jennersville Hospital, Brandywine Hospital, and Phoenixville hospital. These tax breaks cost taxpayers $924,000 each year.
Court calls CEO & Executive Pay “Eye-Popping”
The president of Tower Health made more than $2 million in 2019, and the give highest-paid executives made more than $1 million each. Even worse, 40% of executive bonuses were based on financial performance goals, not the quality of healthcare delivered to the community.
Court Finds Tower Health Demonstrated Profit Motive
The Pennsylvania state constitution requires that non-profit hospitals be “entirely free from private profit motive.”
Despite its status as a non-profit organization, Tower Health was found by the court to be demonstrating profit motives through actions such as charging management fees from its hospitals and charging interest on other properties.
Another requirement for PA hospitals to receive tax breaks is that they “donate or render gratuitously a substantial portion of services,” meaning they offer care to those who need it regardless of whether they can pay.
A Wake-Up Call for PA Hospitals?
Tower Health is far from alone in its executive pay and profit-driven motives in our state. According to Lown Hospitals Index data, at least 40 nonprofit hospital CEOs in the state made at least $1 million in 2019, and ten made $2 million or more. Some examples are even more extreme; the former CEO of UPMC, Jeffrey Romoff, made over $10.4 million in total compensation in 2020 and Geisinger CEO Jaewon Ryu was paid $4.6 million in 2020. Others are not fulfilling the requirement to provide care for those who cannot pay or investing in their local communities.
It’s time for Pennsylvania hospitals to pay their fair share. Sign the petition to put an END to medical debt and learn more about our work to make sure hospitals pay their fair share.