A new report suggests Virginia’s nonprofit hospital systems aren’t spending enough to treat the poor. But the hospital systems say they spend hundreds of millions on that care.
“They’re prioritizing investing and growing their hospital system and resources over providing charity care,” said Dr. Lisa Grabert, a health policy professor at Marquette University. She was talking about a recent Hospital Spending Watch study of 2023 data that analyzes how Virginia’s nonprofit hospital systems are spending funds from a drug rebate program designed to increase their ability to serve the poor.
But Grabert says that program is being abused.
“About 120% more is invested in stocks and bonds for hospitals that participate in the program versus those who do not," Grabert told Radio IQ. "The priority is for it to be invested into what's called charity care or provide resources for patients at low-income levels or are uninsured.”
But Julian Walker with the Virginia Hospital & Healthcare Association said the study failed to take into account additional data that shows hospitals are spending hundreds of millions in services, and community benefits in the billions.
“Hospitals continue in Virginia to fund Medicaid expansion which has helped more than 550,000 low income and previously uninsured adults gain coverage," Walker said in an interview Monday. "Since 2018, Virginia hospitals have contributed more than $3.6 billion to fund Medicaid expansion. From what I saw in that report," he added. "I didn’t see any of that critical context mentioned.”
Both Grabert and Walker said concerns about use of funds from the drug benefit program have been targets of critics and lawsuits. Grabert said federal legislative efforts have stalled, but states could try their own regulation, too.
“They could say the charity care has to be above the average for all hospitals within a state,” Grabert said.
Walker, meanwhile, said federal cuts under President Donald Trump are already putting Virginia’s hospitals in a tight spot.
“The One Big Beautiful Bill cuts a trillion dollars over a decade," Walker said. "The impact on Virginia hospitals is projected at full implementation will be more than $2 billion a year.”
