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Illustration: Lazaro Gamio/Axios

Not-for-profit hospital systems increasingly operate more like corporate titans on the stock exchanges than the charities they promote themselves to be.

The big picture: As hospital systems have gotten larger, they have hosted more investor calls, released more financial data and attended more conferences and roadshows to attract banks and municipal debt buyers — all while health care spending continues to soar.

Where things stand: Almost 60% of community hospitals are private and nonprofit, and therefore don't pay income or property taxes. But hospitals are more on par with pharmaceutical giants and insurance companies than soup kitchens.

  • Most hospitals are part of larger systems after years of frenetic merger and acquisition activity.
  • Kaiser Permanente ranks just behind Johnson & Johnson in revenue — which would make it one of the 50 largest corporations in the country.
  • More than two dozen private, not-for-profit hospital systems would sit in the Fortune 500 rankings.

The intrigue: Hospitals that want to erect new buildings or buy new technology issue debt in municipal bond markets instead of the public markets. And more hospital systems "increasingly are trying to sell themselves to investors as they expand and become more complex to ensure they get the best rates when they borrow," the Wall Street Journal reported in 2016.

  • The 2008 financial meltdown led to more regulations for banks and investment firms in the municipal markets. As a result, those groups have been pushing for more disclosure and transparency from hospitals, said Eb LeMaster, a managing director at health care financial advisory firm Ponder & Co.
  • Hundreds of hospitals, ranging from small $100 million facilities to $20 billion behemoths, now regularly post financial documents and other data on municipal bond sites.

Yes, but: While transparency has increased, it's still not perfect.

  • CommonSpirit Health, the new hospital system that merged Catholic Health Initiatives and Dignity Health, held an investor day in Chicago this week — an event normally conducted by companies trading on the public markets.
  • The investor day comes roughly a month before CommonSpirit executives will tour London, New York, Boston, Chicago and Los Angeles to gin up interest in a $6 billion bond offering. That offering will include tax-exempt bonds, which the public subsidizes.
  • However, media were excluded from attending the investor day. A CommonSpirit spokesperson justified the policy by saying "it was important ... to provide information directly to those who have purchased the health system's bonds."

The bottom line: "Not-for-profit" does not mean "no profit."

  • Hospitals are swimming in cash, which has attracted investors to them. But hospitals' financial pursuits have raised concerns about whether they are continuing to chase revenue and inflate health care costs at the expense of patients.

Go deeper: How banks and law firms make millions from hospital debt

Go deeper

Asymptotic Florida students exposed to COVID no longer have to quarantine

Florida Gov. Ron DeSantis during a September news conference in Viera, Fla. Photo: Paul Hennessy/SOPA Images/LightRocket via Getty Images

Florida Gov. Ron DeSantis (R) announced Wednesday an emergency order allowing parents to decide whether their children should quarantine or stay in school if they're exposed to COVID-19, provided they're asymptomatic.

Why it matters: People infected with COVID-19 can spread the coronavirus starting from two days before they display symptoms, according to the CDC. Quarantine helps prevent the virus' spread.

Federal judge: Florida ban on sanctuary cities racially motivated

Florida Gov. Ron DeSantis. Photo: Joe Raedle/Getty Images

A federal judge on Tuesday struck down parts of a Florida law aimed at banning local governments from establishing sanctuary city policies, arguing in part that the law is racially motivated and that it has the support of hate groups.

Why it matters: In a 110-page ruling issued Tuesday, U.S. District Judge Beth Bloom said the law — signed and championed by Gov. Ron DeSantis (R) — violates the Constitution's Equal Protection Clause because it was adopted with discriminatory motives.

Biden steps into the breach

Sen. Joe Manchin heads to a meeting with President Biden today. Photo: Kevin Dietsch/Getty Images

President Biden ramped up the pressure on his fellow Democrats Wednesday, calling a series of lawmakers to the White House in the hope of ending infighting and getting them in line.

Why it matters: Divisions within the party are threatening to derail Biden's top priorities. After several weeks of letting negotiations play out, the president is finally asserting his power to ensure his own party doesn't block his agenda.