How the Reddy family squeezes millions out of their “non-profit” hospitals
How much charity goes on at the Prime Healthcare Foundation?
In 2024, the Prime Healthcare Foundation claimed to provide $27,000,000 worth of charity care. Their tax filings that year, however, show only $3.5 million in net contributions to financial assistance, the typical measure of charity care spending. This accounts for only 0.42% of their expenses, a paltry 1/3 of the median amount among hospitals.
How much cash does the Reddy family squeeze from their non-profit hospitals?
In the same year, Prime Healthcare Foundation also made over $104,000,000 in acknowledged payments directly to companies providing management, administrative, and professional services directly owned by the Reddy family. Hospital management is very profitable when you don’t need to worry about paying all the actual bills for labor and facilities, and the Reddy family is likely bringing in tens of millions in profits off these services alone.
How the Reddy family profits from their non-profit
When Prime Healthcare Foundation buys another hospital, it also buys another revenue stream for the Reddy family. Between a 6% management fee, and millions in contracts with Reddy owned firms, every new non-profit hospital is a golden opportunity. But the Reddys also use the non-profit hospitals to make their for-profit system even more profitable. By dumping hospitals with the least lucrative patients into the foundation, they save tens of millions in taxes. At the same time, the scale of 21 more non-profit hospitals helps them share costs and leverage their power in negotiations with insurers for higher prices.