On July 16, the Market Institute joined over 40 organizations in a joint letter to Speaker Mike Johnson and Senate Majority Leader John Thune urging Congressional action to end wasteful spending and government distortion in the healthcare system—particularly in the realm of large non-profit hospitals.
As the letter notes, hospitals receive roughly 37% of all Medicare spending and 32% of Medicaid—totaling around $650 billion annually. Much of this spending creates rent-seeking behavior, fuels inefficiency, and leaves taxpayers on the hook.
“Until this hospital sector…is freed from this government influence, socialized medicine remains a key threat to the American people,” the signers write.
The letter highlights several key issues:
- Non-profit hospitals provide little charity care relative to the tax exemptions they enjoy. According to the letter, there is a $26 billion gap between the tax breaks these hospitals receive and the amount of charitable care they actually deliver.
- The 340B drug discount program is being abused. Originally designed to help low-income patients, the program is now exploited by hospital systems that resell discounted drugs in wealthier areas, raising costs for everyone.
- “Provider taxes” are a scam on national taxpayers. These arrangements allow states to launder federal Medicaid money through large hospitals—funneling it back with few strings attached.
The coalition calls on Congress to address these issues as part of ongoing tax and healthcare reforms. Specifically, lawmakers should revisit the tax-exempt status of large non-profit hospitals, reform the 340B program, and phase out provider tax schemes.
“There is a lot to do to get the government’s nose out of the large, non-profit hospital sector,” the letter concludes. “Until we do so, free market healthcare will remain a far-off goal.”
The Market Institute is proud to stand with fellow free-market and taxpayer advocacy groups in this call to action.
📄 Read the full letter [PDF link]
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