Celebrity-Backed St. Jude’s Children’s Hospital Slammed By Pro Publica Investigative Report

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St. Jude’s Children’s Hospital, founded by the late actor Danny Thomas and endorsed by numerous celebrities, has been slammed in a just-out report for its financial practices, and for using at least half of its fundraising on administrative and marketing tasks. It also accused the Memphis hospital of “hoarding” its funds.

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Pro Publica, a nonprofit newsroom dedicated to investigative reporting in the public interest, issued the report Friday. Its headlne: “St. Jude’s Hoards Billions While Many of its Families Drain Their Savings.”

While the Pro Publica report acknowledges that “It is unquestioned that St. Jude has helped thousands of children and their families over the decades,” the report questions whether it has done all it can.

Among the report’s allegations:

  • St. Jude spends about $500 million a year on patient services — a figure that includes all medical care and other assistance. But very little of what St. Jude raises from the public goes to pay for food, travel and housing for families, the investigation found. Last year, it was 2% of the money raised, or nearly $40 million.
  • Last year, St. Jude raised a record $2 billion. But U.S. News & World Report ranked it the country’s 10th-best children’s cancer hospital, while the hospital raised roughly as much as the nine hospitals ahead of it put together. Pro Publica said it currently has $5.2 billion in reserves, a sum large enough to run the institution at current levels for the next four and a half years without a single additional donation.
  • Only about half of the $7.3 billion St. Jude has received in contributions in the past five fiscal years went to the hospital’s research and caring for patients, according to its financial filings with the Internal Revenue Service. About 30% covered the cost of its fundraising operations, and the remaining 20%, or $1 of every $5 donated, increased its reserve fund.
  • ProPublica also said a “substantial portion of the cost for treatment” is paid not by St. Jude, but by families’ private insurance or by Medicaid, the government insurance program for low-income families. About 90% of patients are insured, bringing in more than $100 million in reimbursements for treatment a year. Non-insured families are assisted in finding insurance, St. Jude does cover copays and deductibles.

In written responses, lawyers for St. Jude and its fundraising arm, the American Lebanese Syrian Associated Charities, or ALSAC, put the emphasis on its accomplishments since opening in 1962.

“ProPublica should be celebrating St. Jude and ALSAC for their commitment to finding cures, saving children’s lives, and optimizing patient outcomes,” the response said.

The hospital is already responding to the report’s allegations.

ProPublica provided St. Jude with the findings of its reporting. The hospital subsequently informed families of “a dramatic expansion” in the assistance it will give to parents and other relatives during their children’s treatment in Memphis.

That includes increased travel benefits to two parents instead of one, and covering regular trips to Memphis for siblings and other loved ones. St. Jude’s letter to parents said the changes take effect Nov. 15.

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