I work in hospital finance these days, after over a decade in direct patient care. I have worked for federally-owned hospitals, privately owned ones, and non-profit research systems. I have at least some idea what I'm talking about, I hope.

I think it's more fair to say that some hospitals/systems are crappy mega-businesses, some are well-intentioned businesses, and some return tremendous value in exchange for their tax-exempt status.

Some of the worst offenders are the HCA-owned hospitals; they tend to be terrible about taking over community hospitals and then slashing wages and benefits year-over-year, driving away the skilled staff and drastically lowering the quality of patient care in the process.

Large military hospitals generally tend to be quite cost-efficient and well-run (with major exceptions here and there when the top officials are skimming off the top) and also tend to be excellent training and research facilities.

Major university systems (like University of $Your_State Hospital) are generally well-funded, and are great about reinvesting their profits into research, grants, employee profit-sharing, and so on. Administration tends to be a bit too-heavy and sedentary, however, since there is less pressure to perform. There will be some variance in quality depending on the state, population and funding.

Small, independent community hospitals tend to have the most variance, depending on their oversight and the competence vs. complacence factor in the upper administration. The good ones are wonderful, the bad ones are horrific, and everything in between. Tend to get snapped up by larger systems these days as changing compensation systems make being an indie facility less profitable, but that depends on a lot of factors.

So, yeah. Sometimes you're absolutely right, sometimes you're terribly misrepresenting some great work being done by very dedicated people.

Probably the best solution would be to cap certain types of spending by nonprofits to limit how much they can dump into executive profits or affiliate spending (pumping money into privately owned businesses at inflated rates to move that sweet tax-free money into a few people's pockets), but with exemptions for things like research spending (with limits on what is considered research to avoid shell company trickery) and community reinvestment.