THE COST OF COMPASSION
Nonprofit Cancer Centers Unmasked
Welcome to the Financial Underbelly of American Oncology
Cancer treatment often wears the face of compassion—gleaming facilities, foundation fundraisers, and nonprofit mission statements. But behind the language of care lies a revenue engine virtually indistinguishable from its for-profit counterparts.
White coats, polished floors, and the word “nonprofit” engraved in the signage gave us confidence. It felt like a promise that care would be centered on healing, not billing. But by the fifth invoice we began to realize something disturbing: “nonprofit” didn’t mean non-commercial. It meant untaxed, unregulated and often, unaccountable.
This page lays out what patients are rarely told: that cancer care is not just a clinical system but a financial one. And it runs on models more familiar to Wall Street than to bedside compassion.
The Nonprofit Façade
Nonprofit cancer centers are often perceived as altruistic institutions focused solely on care. Legally, they are exempt from:
Federal income tax
Property tax
Sales tax on medical equipment
Charity care mandates with clear accountability
Yet despite these advantages, many operate with the pricing structures, lobbying power, and investment portfolios of large corporations. “Nonprofit” is not a business model—it’s a tax classification.
Comparative Snapshot: Nonprofit vs. For-Profit
Case Study: Memorial Sloan Kettering (2022)
Total Revenue: ~$6.2 billion
Net Assets: ~$8.9 billion
CEO Compensation: $6.7 million
Reported Charity Care: ~1.9% of operating costs
Marketing & Lobbying: >10× more than charity care
Property Tax Paid: $0 (501(c)(3) status)
“Charity in name. Conglomerate in behavior.” — Health Policy Analyst (Anonymous)
Case Study: MD Anderson Cancer Center (FY 2022–24 data)
Reported revenue: ~$5.7 billion for FY 2022, ~$7.5 billion for FY 2023, and ~$8.9 billion for FY 2024. MD Anderson Cancer Center
Endowment/restricted net‑assets: Over $1.7 billion in restricted endowments at August 31, 2022. MD Anderson Cancer Center
“Nonprofit” status may signal mission but here it coincides with multi‑billion‑dollar annual revenue and institutional investment assets.
The 340B Loophole: Quiet Profits on Discounted Drugs
Created in 1992, the 340B Drug Pricing Program allows qualifying hospitals to buy certain outpatient drugs at deep discounts — often 30–50% below market value. But here’s the twist:
These hospitals bill insurers (including Medicare) at full price
They pocket the difference known as the 340B spread
There is no legal requirement to pass savings to patients
Cancer drugs are among the most lucrative in this model — and 340B has become a silent profit engine.
Patients are rarely aware they’re part of this spread. Their bills don’t drop — only the hospital’s margins swell.
Physician Incentives: The Oncology Exception
Unlike most physicians, oncologists are allowed to profit directly from the drugs they prescribe.
Under the buy-and-bill system, oncologists purchase chemo drugs at wholesale prices and then bill insurers for administering them often at a markup.
This places financial incentives squarely at the point of care, where treatment decisions and revenue generation overlap.
Combined with 340B, this system can produce multi-million dollar drug margins, even within so-called nonprofits.
Where the Money Really Goes: Assets, Not Access
Many nonprofit cancer centers don’t just treat patients, they invest like hedge funds.
Common Investment Vehicles:
Public equities (e.g., S&P 500)
Hedge funds & private equity
Commercial real estate
Oncology-focused startups and venture capital
In 2019 alone, nonprofit hospital systems held over $283 billion in financial assets — operating like institutional endowments with little public oversight.
“We call it a healing institution. But from the spreadsheets, it reads like an investment firm with infusion chairs.”
Closing Reflection: The Other Side of the Balance Sheet
This isn’t about resentment. It’s about transparency. Patients deserve to know that behind every treatment decision may be a financial algorithm, and behind every act of care may sit an institutional balance sheet.
Cancer care in America isn’t just expensive because it’s complex.
It’s expensive because the system is built to extract, not just to heal.
Selected Citations:
Wu, X. (2020). Drivers of High U.S. Healthcare Spending: An International Comparison.
https://consensus.app/search/wu-x-2020-drivers-of-high-us-healthcare-spending-a/EhQBWrHVRa23BGtIR1adjQ/Papanicolas, I., Woskie, L. R., & Jha, A. K. (2018). Health Care Spending in the United States and Other High-Income Countries.
https://jamanetwork.com/journals/jama/article-abstract/2674671American Hospital Association & Kaiser Health News (2022). How Nonprofit Hospitals Use 340B Revenue Models.
View Report from KHNIRS Form 990 (Memorial Sloan Kettering Cancer Center, 2022).
https://projects.propublica.org/nonprofits/organizations/131924236U.S. Government Accountability Office (GAO). 340B Drug Discount Program: Oversight of Profits and Patient Benefits.
https://www.gao.gov/products/gao-26-108784