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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

US cites Ukrainian oligarch Kolomoyskyy for involvement "in significant corruption"

State Secretary Antony Blinken on Friday designated former Ukrainian public official Ihor Kolomoyskyy as an individual involved "in significant corruption."

Why it matters: The designation prohibits Kolomoysky and his immediate family from traveling to the U.S. and signals that the Biden administration will help Ukrainian President Volodymyr Zelensky in his fight against oligarchs and entrenched corruption. U.S. authorities view Kolomoyskyy as among the most powerful of the oligarchs.

U.S. economy added 379,000 jobs in February

Data: FRED; Chart: Axios Visuals

The economy added 379,000 jobs in February, while the unemployment rate dropped from 6.3% to 6.2%, the Labor Department said on Friday.

Why it matters: The first Biden-era jobs report shows hiring surged as coronavirus cases eased — though a full recovery remains far off. Economists expected the economy to add roughly 182,000 jobs last month, after adding a paltry 49,000 in January.

This story is breaking news. Please check back for updates.

Dion Rabouin, author of Markets
2 hours ago - Economy & Business

Workers are getting a really bad deal

Illustration: Eniola Odetunde/Axios

This week's spate of data highlighted the difficulties Americans who have lost their jobs have had bouncing back from the coronavirus pandemic, and just how much those who have managed to keep their jobs have been working.

What's happening: The Labor Department reported Thursday that the productivity of American workers fell by a revised 4.2% annual rate in the fourth quarter, the largest decline in 39 years.