A new report from the Institute for Health Policy Accountability (IHPA) alleges that several of Georgia’s largest nonprofit hospital systems are exploiting the federal 340B Drug Pricing Program while investing heavily in expansions that often benefit affluent communities rather than low-income patients.
The 340B program was created by Congress in 1992 to help hospitals serving vulnerable populations reduce prescription drug costs. According to IHPA, however, “wealthy, non-profit hospitals around the country use 78% of a federal program designed to help low-income patients in underserved areas,” and Georgia’s largest systems offer a clear example of how the program has drifted from its original purpose.
IHPA’s analysis shows that major hospital systems in Georgia who utilize 340B reported a sharp uptick in revenue growth in recent years. Northside Hospital reported more than $7.7 billion in revenue in 2024, while Wellstar Health System reported over $2.5 billion. Phoebe Putney Memorial Hospital and St. Joseph’s/Candler Health System also reported hundreds of millions in annual revenue.
At Northside Hospital, IHPA found that more than ten employees earned over $1 million annually, including President and CEO Robert Quattrocchi, whose compensation approached $5 million in 2024. The system has also pursued major expansion projects, including a new hospital tower in Gwinnett County, an area with a median household income well above the national average.
The report highlights similar concerns at Phoebe Putney Memorial Hospital, where executive compensation remained high even as the system faced scrutiny over patient safety issues and anticompetitive behavior.
The report states: “The current CEO, Scott Steiner, receives over $1.6 million in annual compensation from the system’s parent organization, according to the latest 990. Former CEO Joel Wernick – who led Phoebe Putney through its acquisition of Palmyra – received a $7 million retirement package upon leaving Phoebe Putney in 2018.”
Wellstar Health System is also cited for paying tens of millions of dollars in executive compensation while closing hospitals that served predominantly low-income communities in metro Atlanta. Following those closures, Wellstar announced new investments and plans for hospital development in higher-income areas, prompting complaints to federal agencies questioning whether the system continues to meet the requirements of its tax-exempt status.
IHPA’s report also examines St. Joseph’s/Candler Health System, whose net assets total over $1 billion.
The findings come amid growing scrutiny of the 340B program, including recent hearings in the U.S. Senate where lawmakers raised concerns that the program may be contributing to higher health care costs rather than lowering them for vulnerable patients.
The Institute for Health Policy Accountability describes itself as an independent research organization that “provides fact-based research and analysis across the public policy landscape.”
