Opinion | Keller: Missouri’s “Nonprofit” Hospitals Are Getting Rich While Crying Poor

Missouri’s hospital barons want you to believe they’re on the ropes.

Executives from Mercy, BJC and SSM Health are fanning out across Washington right now, clutching their pearls over new Trump administration Medicaid rules they claim could cost hospitals hundreds of billions of dollars. The Missouri Hospital Association just posted its highest quarterly lobbying spend since 2011 to fight the changes.

Somewhere, a violin is playing.

Before anyone reaches for the smelling salts, Missourians ought to take a look at what these “nonprofit” hospital systems have actually been doing with their money. 

Spoiler: They aren’t exactly struggling.

Rewind to 2020. In the early weeks of COVID, Missouri’s three big tax-exempt hospital systems — Mercy, BJC and SSM — all made essentially the same solemn pledge: Leadership would share the pain.

Mercy said executive compensation would be cut by as much as 26%. BJC announced cuts ranging from 5% to 25%. SSM said executive pay would be frozen. At the same time, the systems furloughed thousands of workers and suspended retirement contributions as they scrambled to cut costs.

Very noble.

Then the tax filings came out, and the violin stopped.

Then-Mercy CEO Lynn Britton didn’t take a pay cut. He took home $14.6 million in 2020 — more than $10 million above the previous year and enough to make him the seventh highest-paid nonprofit hospital executive in the country.

Then-BJC CEO Richard Liekweg’s compensation went up too, reaching $2.6 million. SSM CEO Laura Kaiser saw hers climb from $2.2 million to $3.4 million.

These weren’t doctors saving the lives of COVID patients in the ICU. These were executives whose compensation increased while nurses and other employees were losing paychecks and retirement contributions.

If a private company pulled that stunt, cable news would run with it for a week. Because these organizations wear the “nonprofit” label, it barely made a ripple.

And it didn’t stop when the pandemic did.

Kaiser was pulling in $5.2 million last year to run SSM. BJC’s current CEO, Nick Barto, received roughly $3 million. Liekweg’s final full-year compensation before retirement reached $4.8 million.

Meanwhile, BJC — apparently flush enough to go shopping — acquired St. Luke’s in Kansas City in January 2024 and now sits atop a system with roughly $12 billion in combined revenue. SSM operates a $12.7 billion enterprise.

Call these systems whatever the IRS allows them to call themselves. In practice, they are some of Missouri’s largest corporations, run by executives compensated like major corporate CEOs — with revenue ultimately coming from patients, insurers and taxpayers.

Even U.S. Rep. Jason Smith, the Missouri Republican who chairs the House Ways and Means Committee, isn’t buying the poor-mouthing anymore. Tax-exempt hospitals, he said this year, “look like hedge funds with hospital beds.”

He has a point.

And that scrutiny helps explain why hospitals are now fighting so hard against changes coming from Washington.

Here’s what has them rattled: CMS is moving to rein in financing arrangements that allow states to tax hospitals, use those revenues to help draw down additional federal Medicaid dollars, and then return substantial payments to hospitals through the Medicaid program.

Hospitals warn that those changes, combined with broader congressional Medicaid savings, could cost the industry hundreds of billions of dollars through 2034.

But taxpayers are entitled to ask a basic question: Where is all that money going?

If closing financing loopholes means fewer eight-figure compensation packages and fewer generous “market adjustment” bonuses, Missouri taxpayers shouldn’t be expected to write sympathy cards.

None of this means Missouri doesn’t need strong hospitals. Rural Missouri needs a working emergency room, full stop, and nobody serious argues otherwise.

But Missourians also shouldn’t automatically accept every crisis alarm sounded by hospital systems paying executives millions of dollars a year.

Free markets and fiscal discipline are worth defending — especially when the “market” involves tax-exempt institutions heavily dependent on government reimbursement while simultaneously calling themselves charities.

The Trump administration is right to ask hard questions about where Medicaid money goes once it leaves Washington. Missouri lawmakers should be asking similarly hard questions about the tax-exempt hospital empires operating in their own backyard.

Hospitals deserve fair reimbursement for treating patients. Doctors, nurses and rural communities deserve financially stable health systems.

But taxpayers deserve something too: transparency and accountability.

Because when a tax-exempt hospital says it desperately needs more taxpayer money while its executives are collecting multimillion-dollar compensation packages, Missourians have every right to ask whether the money is actually reaching the bedside — or stopping somewhere along the way in the executive suite.