Report: Valley Children’s stuffed community benefit dollars into its medical group, eschewed subsidized care

The pediatric hospital’s allocation of community benefit investments – awarded with tax breaks – went into the hospital’s controlled medical group.

Over the last decade Valley Children’s Hospital sent the vast majority of its community benefit investments to its associated medical group and did not report any subsidized healthcare, a common practice among nonprofit hospitals. 

Nonprofit newsroom Fresnoland first reported how the hospital allocated its community benefit investments in a report Wednesday that reviewed the last decade of tax returns. 


The big picture: According to the report, Valley Children’s spent $90.5 million on direct community investment from 2013 to 2023. 

  • But more than 80 percent of that investment went to Valley Children’s Medical Group, totaling $73.7 million. 
  • That comes as Valley Children’s made more $1.1 billion in profit in the last decade and had $1.3 billion in cash and investments in September 2023, according to audited financial statements. 
  • Direct community investment is money that the hospital donates to the community for tax breaks. 
  • A common form of community investment is subsidizing health services, but Fresnoland reported that Valley Children’s did not report spending any money on subsidizing health service in the last decade. 
  • Valley Children’s spokesperson Zara Arboleda told the publication that the donations to the associated medical group were a community benefit since they helped establish and cover costs at two specialty care centers in Bakersfield and Modesto. 

Pandemic profits: Valley Children’s revenue skyrocketed during the COVID-19 pandemic, which coincided in part with receiving $137 million in government grants from 2020 to 2022. 

  • The hospital and its associated nonprofits received $70.7 million in federal pandemic relief funds over the period, but Valley Children’s has not publicized how it has spent that money. 
  • Valley Children’s reported $92.3 million in profit in 2020, the first year of the pandemic. That number was over double what it made the year before. The hospital also made $82.8 million in profit in 2021. 
  • Profits skyrocketed to $354 million in 2022, which was fueled by a record total revenue of $1.1 billion. 
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