Is the job market for health execs about to undergo a shakeout?

Among healthcare organizations sweating the possible passage of the “One Big Beautiful Bill,” few have more to worry about than nonprofit hospitals and health systems that compete with privately held or publicly traded rivals for executive talent.

That’s because the bill, formally H.R. 1, would balloon the breadth of the executive compensation excise tax. It would do so by making the tax applicable to all employees of charitable orgs who make more than $1 million a year. 

Similarly affected would be execs set to collect a generous parachute package should their institution undergo a merger or acquisition. 

The analysis is from legal eagles at McDermott Will & Emery.

“The Act would not eliminate the medical services compensation exception,” lead author Travis Jackson, JD, and co-authors reassure readers. However, the reach and financial consequences of the expanded excise tax could be “significant” for nonprofit healthcare institutions trying to retain or recruit key decision-makers. 

Suddenly harder-to-hold workers may include administrators as well as C-suiters, the authors suggest. 

Parking tax back in play

Meanwhile the bill could force nonprofit hospitals to allocate more of their already-thin margins to operating expenses. 

This is so because the legislation would bring back a tax on employee stipends for parking and other fringe benefits involving the costs of commuting to work. 

This informally named “parking tax” was enacted in 2017 and repealed two years later.

Nonprofit hospitals in a bind 

Jackson and colleagues note other burdens the One Big Beautiful Bill might impose on nonprofit hospitals and health systems. Key among them are these two: 

• Increasing the tax on net investment of colleges and universities from 1.4% up to 21% (based on endowment value per student). “The magnitude of this tax may result in university sponsors of academic medical systems seeking to renegotiate funds flow arrangements to recapture a portion of revenue lost to the tax,” Jackson and co-authors comment. 
   
• Increasing the excise tax on private foundations up to 10% (based on assets of $5 billion). “This tax may decrease the amount of funding that private foundations are willing to contribute to nonprofit health systems,” Jackson and colleagues write. 

Other healthcare-specific provisions in H.R. 1 include contested reductions in Medicaid spending involving work requirements and eligibility changes.

Read the full brief from McDermott Will & Emery. 

Musk vs. Trump 

The “One Big Beautiful” bill passed the House May 22 and now faces an uncertain fate—or a substantial rewrite—in the Senate. 

Due to President Trump’s vocal support of the legislation, popular perception is that the Executive Branch is its author. In fact, it originated in the House with GOP Rep. Jodey Arrington of Texas as its sponsor. 

This week it took heavy fire from former DOGE head Elon Musk, who denounced it as a “disgusting abomination.” 

“Either you get a big and ugly bill or a slim and beautiful bill,” Musk wrote on X. “Slim and beautiful is the way.”

A war of words between Musk and Trump has ensued.