KHN analysis: Nonprofit hospitals invest for returns, not mission

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Nonprofit hospitals and health systems are experimenting as venture capitalists for startups, but most of the time they aren't selecting investments that put their humanitarian goals first, according to a Kaiser Health News analysis of IRS filings. 

For its analysis, KHN examined IRS filings from 1,632 nonprofit organizations that owned or operated a total of 2,568 hospitals. The analysis did not include investments that some nonprofit systems kept in a separate organization or foundation. 

Four things to know: 

1. Nonprofit hospitals and health systems had more than $283 billion in hedge funds, private equity, venture funds, stocks and other investment assets in 2019, according to the analysis. 

2. Nonprofit hospitals and health systems classified 7 percent — $19 billion — of the total investments held in 2019 as principally devoted to their missions, the KHN analysis found. 

3. Nonprofit healthcare organizations argue the investments benefit their missions because they provide extra income and new software, devices and other innovations their hospitals use, according to KHN

4. Several nonprofit hospital and health system venture capital funds have grown rapidly in recent years, with one topping $1 billion this year. 

Read the full Kaiser Health News article here

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