Tax-exempt hospital systems across Texas are pouring public subsidies into multimillion-dollar executive pay and foreign investments rather than patient care, a new watchdog report alleges.
Conservative policy group Save Our States released fresh research Monday accusing three large tax-exempt healthcare systems in Texas of waste, abuse and misspending tied to government programs and charity tax status. The findings, and a companion YouTube ad, were first shared exclusively with the Daily Caller News Foundation.
The report zeroes in on Memorial Hermann Health System in the Greater Houston area, Mission Regional Medical Center, and Barrio Comprehensive Family Health Care Center with its ties to CommuniCare Health Centers. It is the group’s first Texas-focused accountability push after a broader June report covering nonprofit hospitals in eight other states.
Trent England, executive director of Save Our States, put the charge in plain terms for taxpayers who support the whole arrangement.
"Taxpayers shouldn’t be forced to foot the bill of nonprofit hospitals that act more like big businesses than community charities."
England said giant systems collect millions through government programs and tax breaks, then spend heavily on executive perks, foreign investments, art collections and sponsorship deals. Subsidies and tax benefits, he argued, are supposed to help Texas patients, not bankroll extravagance. He called on lawmakers to examine hospitals that have drifted from their charitable mission.
Memorial Hermann ranks among the largest nonprofit hospital networks in Southeast Texas. It runs 17 hospitals and more than 280 care sites, and employs more than 35,000 people across the Greater Houston area.
Save Our States’ review of the system’s IRS Form 990 filings found CEO and President David L. Callender received $6,061,094 in total compensation in the most recent tax year on record. Four other executives, Erin Asprec, Alec King, James McCarthy and Josh Urban, each drew between $2 million and $3 million a year. Twenty-one additional Memorial Hermann executives received between $1 million and $2 million apiece.
The same analysis flagged large foreign investment positions. The report lists $666 million tied to Central America and the Caribbean, $42 million in North America (Canada and/or Mexico), $24 million in East Asia and the Pacific and other areas, plus $315,000 in Europe.
Memorial Hermann has also served as the official healthcare provider for the NBA’s Houston Rockets since 2005. Neither the hospital system nor the team would disclose the annual sponsorship figure, citing a confidentiality agreement. Outside experts estimated the deal at more than $1 million per year.
The watchdog further claimed facilities affiliated with Memorial Hermann have directed nearly $2 billion collectively into art budgets across three centers, language the group used to illustrate what it calls inflated spending far afield from bedside care.
A second major thread in the research involves CommuniCare Health Centers and its connection to Barrio Comprehensive Family Health Care Center. Tax-exempt reports show business ties between the two. Save Our States found Barrio multiplied its revenue more than tenfold over the last decade, driven largely by a government drug-discount arrangement.
CommuniCare’s own revenue climbed from $28.8 million in fiscal year 2013 to $397.4 million in fiscal year 2024. More than 73 percent of that revenue came from the federal 340B drug pricing program, according to the report. The program lets qualifying providers buy outpatient drugs at steep discounts. Net income at CommuniCare rose from about $4.6 million in FY2015 to roughly $23.6 million in FY2024. CEO Paul Nguyen’s compensation more than doubled over the same span, from $330,000 in FY2015 to $740,000 in FY2024.
Federal oversight caught up on at least one compliance point. The Health Resources and Services Administration, or HRSA, the agency that polices 340B, audited CommuniCare and found “duplicate discounts, inaccurate or incomplete information on the Medicaid exclusion file.” HRSA rules prohibit manufacturers from having to give both a 340B discounted price and a Medicaid rebate on the same drug. The report states CommuniCare was sanctioned and required to make repayments to manufacturers.
That pattern sits at the center of the watchdog’s complaint: a tax-exempt provider scales up on a taxpayer-backed discount program, executive pay and net income rise with it, and regulators later flag billing integrity problems.
The third system named is Mission Regional Medical Center. Save Our States reported the facility is currently under investigation for promoting discounted birth packages across the U.S.-Mexico border, packages the group says are subsidized by American tax dollars. The research does not name the investigating authority or detail formal charges, but the claim fits the broader theme the group is pressing, public support flowing to activity that looks more commercial than charitable.
England’s message to elected officials was direct.
"Giant hospital systems get millions from government programs and tax breaks, then lavishly spend on executive perks, foreign investments, luxurious art collections, and flashy sponsorship deals."
He added:
"Subsidies and tax benefits are supposed to help Texas patients, not bankroll executive perks and other extravagance. Lawmakers must take a closer look at these nonprofit hospitals that have strayed far from their charitable mission."
The release lands in a climate where healthcare costs and program integrity already rank high for voters. A July KFF poll found healthcare affordability and government healthcare fraud remain leading issues. Save Our States is betting that Texas-specific examples, seven-figure executive paydays, nine-figure overseas holdings, sports branding, and 340B-driven revenue spikes, will sharpen that concern into legislative pressure.
Nonprofit hospitals receive their tax exemptions on the promise they deliver community benefit. When Form 990s show CEO pay above $6 million, dozens of million-dollar deputies, hundreds of millions parked in foreign investments, and art budgets measured in the billions across affiliated centers, the gap between the charity label and the spending record becomes the story. The same holds when a clinic’s revenue multiplies on a federal discount program and an HRSA audit later finds duplicate-discount violations serious enough to demand manufacturer repayments.
None of the dollar figures in the Save Our States research required a secret leak. They came from the systems’ own tax filings and from public program data. The group’s contribution was to pull those numbers into one place, pair them with the Rockets deal and the border packaging claim, and ask whether Texas lawmakers still believe the current bargain serves patients first.
Tax exemptions and public programs are not party favors. When nonprofit hospital systems treat them like unrestricted corporate cash, taxpayers have every right to demand the books, and the mission, be put back in order.
