St. Jude Hoards Billions While Running Misleading Advertising about Financial Support for Its Patients

by Vins

St. Jude Children’s Research Hospital, one of the nation’s leading pediatric cancer research and treatment facilities, promises that, because “families never receive a bill” from St. Jude’s,” “all a family should worry about is helping their child live.” Yet, a November 2021 ProPublica investigation revealed that St. Jude maintains a $5.2 billion reserve while many St. Jude families struggle to afford all of the costs associated with treatment. St Jude’s $5.2 billion reserve—which would allow it to operate without a single new donation for almost five years—is much higher than it should be, according to non-profit financial experts interviewed by ProPublica. These experts explained that a healthy reserve fund usually amounts to approximately one to two years of operating expenses.

St. Jude has long been a fundraising juggernaut, raising a combined $7.3 billion in the five previous fiscal years, including $1.7 billion in 2019 and $2 billion in 2020. As ProPublica documented, in 2019 St. Jude raised more money than “the rest of the top 10 children’s hospitals for cancer—combined.” As a result, St. Jude’s massive reserve account grew by 58 percent during that time period. On average, twenty percent of St. Jude’s revenue went to its reserve fund, thirty percent went to its fundraising operations, and the remaining fifty percent went to caring for patients.

Even after St. Jude touted its special promise to never bill families for food, transportation, or housing, in 2020 only two percent of its funds, or a little under $40 million, went to cover those costs. In fact, prior to ProPublica’s investigation, St. Jude did not cover nearly as many costs as its advertisements suggested. It only covered transportation and housing for one parent, did not cover these costs for a second parent or siblings, provided only $50 a day as a food stipend for most families (no matter their size), and would only cover hotel stays on the road if a family had to travel more than 500 miles from their home to St. Jude. St. Jude sent families to other charities if they needed additional funds, as the hospital would not cover any other costs associated with treatment, such as lost income. This left many families to worry about much more than their child’s health, as ProPublica detailed through the profiles of numerous families. Many resorted to GoFundMe campaigns to cover treatment costs, one family with a child undergoing treatment was denied hotel stipends because St. Jude incorrectly determined they lived 491 miles away from the hospital, and another had to stop treatment altogether after the family spent $10,000 from a savings account they had been adding to for years, in hopes of making a down payment on a home.

After ProPublica presented its findings to St. Jude, the hospital issued a letter outlining an expansion of the costs it would cover. St. Jude will now cover transportation for two adults, housing for three people, and a $25 per person daily food stipend. While St. Jude now does more to cover a family’s expenses associated with treatment, the ProPublica report also documented other misleading practices by St. Jude. Among them, its lawyers cite a federal anti-kickback statute, which prevents compensation for medical referrals, as a reason for the limited amount of aid available to families. St. Jude’s lawyers have yet to explain how these things are related. St. Jude also claims that its limits on aid are clearly disclosed on its website, when they are not. Furthermore, although St. Jude is proud of its recently approved $11.5 billion six-year strategic plan, which it touts as an “expansion of patient care,” ProPublica author David Armstrong explained in a 1A radio interview that $7 billion of that figure is intended to fund the current operation of the hospital, and $1 billion is marked as depreciation value.

As of April 2022, no corporate news outlets have reported on this story.

Sources:

David Armstrong and Ryan Gabrielson,”St. Jude Hoards Billions While Many of Its Families Drain Their Savings,” ProPublica, November 12, 2021

Avery Kleinman, ”St. Jude Makes Big Promises. Do They Hold Up?,” 1A, November 29, 2021

Student Researcher: Annie Koruga (Ohlone College)

Faculty Evaluator: Mickey Huff (Diablo Valley College)

Review Article with Credder

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