New Investigation Finds Michigan Hospital Giants Padding Executive Salaries, Shortchanging Low-Income Patients, and Cashing in on Federal 340B Drug Discounts

The Institute for Health Policy Accountability (IHPA), an independent authority on key drivers of decision-making in the health care space, today released a sweeping new report exposing how Michigan’s largest “non-profit” hospital systems are sitting on billions in revenue and handing their executives multimillion-dollar compensation packages while sidelining their low-income patients.

The Michigan report continues IHPA’s series, revealing how powerful hospitals profit from the 340B federal drug discount program while putting low-income patients last. The report examines nine major Michigan hospital systems participating in the 340B program: Corewell Health, Henry Ford Health System, Trinity Health Michigan, Bronson Methodist Hospital, Edward W. Sparrow Hospital Association, Allegiance Health, Covenant Healthcare System, University of Michigan Health-West, and Munson Healthcare.

Key findings from the IHPA Michigan report include:

Failure to serve low-income communities

• An analysis of every Michigan non-profit hospital from 2020 to 2022 found that 75% had a fair share deficit, meaning they receive more in tax benefits than they provide in community benefits, totaling $605 million per year.
• Michigan hospitals participating in the 340B program report nearly 50% higher patient revenue than comparable hospitals while providing 30% less charity care.
• University of Michigan Health-West had the largest fair share deficit of any non-profit hospital in the state, averaging $76 million per year between 2020 and 2022.

Lavish executive compensation and corporate excess

• Corewell Health’s president made nearly $5.5 million in compensation in 2024, with total executive compensation exceeding $30.1 million.
• Henry Ford Health’s President and CEO made over $7 million in 2024, with 16 other employees clearing seven figures. Henry Ford’s total executive compensation exceeded $27 million.

Massive revenues and rapid financial growth

• Corewell Health reported $11.5 billion in annual revenue in 2024, a $1.1 billion year-over-year increase of 10.7%.
• Henry Ford Health System generated $5.28 billion in revenue, growing 17.5% year over year, and partnered on a $2.5 billion construction investment that includes housing units and a deal with the Detroit Pistons professional basketball team.
• Trinity Health Michigan brought in $3.28 billion in annual revenue.

Fraud, abuse, and putting profits over patients

• Covenant Healthcare System paid $69 million in 2023 to resolve allegations of improper financial relationships that led to false claims submitted to Medicare, Medicaid, TRICARE, and FECA programs.
• Edward W. Sparrow Hospital Association paid nearly $700,000 to settle claims it violated the False Claims Act through improper Medicare billing, with the U.S. Department of Justice noting the behavior “wastes valuable taxpayer funds set aside to care for the well-being of those most in need.”

Read the full report here.

BACKGROUND ON 340B: 

• The 340B Drug Pricing Program was enacted by Congress in 1992 and meant to lower prescription drug costs for non-profit hospitals that serve low-income and vulnerable communities. Instead, research shows the program has been exploited by major non-profit health systems that generate billions in annual revenue.
• This report follows a Senate HELP Committee hearing in October 2025, where Republican Senators voiced their frustrations with the program.
• According to a CBO analysis late last year, hospitals across the U.S. have exploited the 340B Drug Pricing Program, resulting in significant waste, fraud, and abuse. The report found that the program “encourages behaviors that increase federal spending and raise prices for American taxpayers.”

The Institute for Health Policy Accountability is an independent authority on key drivers of decision making in the health care space. IHPA provides fact-based research and analysis across the public policy landscape, adding a central and currently missing voice to the conversation.

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