The Golden State Warriors celebrate winning the Western Conference Championship, their first in 40 years, en route to the NBA Finals.



The Bay Area should thank their Warriors, led by the NBA’s Most Valuable Player Stephen Curry, for ending a 40-year NBA Finals appearance drought. Warriors faithful everywhere (including several of my esteemed colleagues here at Greenlining), are as hyped as ever as they root for their team to bring an NBA Championship to the Bay Area. Although I’m not a Warriors fan (I’m a die-hard Laker fan… and yes, life is tough for me right now…), I can’t help but share in the pure excitement of my friends who have loyally rooted for their team through thick and thin.

That makes this critique all the more difficult to write.

As many of you may have noticed, due to their sponsorship of the Warriors, Kaiser Permanente has enjoyed primetime advertising alongside the team’s steady ascent. Kaiser’s flashy commercials sketch a cozy image, even going so far as to boast a proactive approach to improving health. These advertisements are catchy – but the glitz and warmth divert attention from much more pressing issues. For starters, where is all this money for expensive commercial airtime coming from?

As a registered nonprofit health plan, Kaiser Permanente receives millions of dollars in tax exemptions from the state and federal government in return for services and programs directed to improve community health, known as community benefit. Analyzing community benefit, which include free or subsidized services that hospitals provide to improve community health, has been a key priority of the Health Equity program. Our advocacy has focused on implementing greater transparency and accountability requirements for nonprofit hospitals, like Kaiser, to publicize their investments in vital health services that serve the community’s interests. By choosing to categorize as a nonprofit organization, these hospitals make a pact with the state, in which the state agrees to exempt them from paying taxes in exchange for investments in charity care and other upstream, community-building activities that improve health outcomes. These hospitals regularly celebrate their role as anchor institutions, particularly in underserved communities; however our research has found this claim to be dubious at best.

Kaiser’s lavish spending on TV ads raises some alarming questions about their community benefit spending. Due to lax regulations at the state and federal level, there is nothing to stop Kaiser (or any other nonprofit hospital for that matter) from claiming their advertising, which has a wellness component, as community benefit. Furthermore, under the current regulatory regime, there are no guidelines that will allow patients or advocates to know whether marketing is being claimed as community benefit. The fact that there are no clear reporting mechanisms to determine exactly how community benefit dollars are spent, leaves too much leeway for the misappropriation and misuse of these funds. This absence of protections for taxpayer dollars, earmarked for community benefit, is a travesty matched only by the hypnotic nature of those misleading commercials.

Other studies have corroborated our findings. In 2010 alone, nonprofit hospitals across the state received $3.27 billion in tax exemptions, but only invested $1.43 billion in charity care, leaving very little clarity on their upstream, community benefit spending. A blatant lack of transparency, coupled with the almost nonexistent community input, clearly illustrates that these hospitals are not doing enough to hold up their end of the bargain. Community benefit represents enormous potential to address very real health disparities, particularly among low-income and communities of color. This may include health education, workforce development, transportation, and affordable housing, just to name a few. However, the longer these hospitals fail to meet their nonprofit obligations, the more these communities will suffer. Disclosing their community benefit spending, and expanding community input are necessary first steps towards fixing this problem.

Our advocacy on community benefits is wonky – I know. But as you wrap your head around this issue, I invite you to ask yourselves the following questions:

  • Is sponsoring a professional basketball franchise, with an estimated value of $1.3 billion, really the best investment to address health barriers?
  • Are the people throughout the Bay Area, in Oakland, Richmond, San Francisco, San Jose, and elsewhere, really benefiting from this partnership?
  • Will this truly yield to greater investments in upstream solutions, where there is truly a great need, particularly in the development of affordable housing, and other pressing health concerns?
  • And finally, will this sponsorship really make people healthier?

As we cheer together these next few weeks, I hope that we keep in mind the impact our nonprofit hospitals and clinics could have if they fully invested in our communities. Bay Area communities, and sports fans living in underserved communities across the state, deserve more, especially from their hospitals.

And for a final plot twist, I’m actually not necessarily against a partnership between Kaiser and the Warriors. Before you accuse me of being hypocritical, let me say this: if Kaiser can prove that this sponsorship, complete with the glitzy commercials, actually led to a healthier community, then great, I’m all for it! But forgive me if I’m a skeptic. I mean, aren’t you?

It’s time for Kaiser and their counterpart hospital systems to start playing by the rules. As a community, we are only healthy when we all have a chance to live healthy, and these hospitals can play a pivotal role in bridging the health gap among underserved communities.

But if the status quo remains unchanged, then we’ll all lose.

UPDATE: We’ve learned more since this was written. Please see this new post for the latest.