Physician-Owned Hospitals

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The Affordable Care Act created an anti-competitive arbitrary ban on new physician-owned hospitals. Learn about how the arbitrary ban harms patients and their communities.

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Physician-Owned Hospitals

Emphasizing the Most Important Relationship in Healthcare: the Patient-Physician Relationship

Physicians have driven innovation in healthcare throughout history.

Physician ownership and management of hospitals has a long and distinguished record in the United States, beginning with some of the earliest hospitals, which were built and managed by physicians such as the Mayo Brothers.

Over time, new entities were formed to operate hospitals, and they often removed physicians from leadership positions.

Beginning in the early 2000s, a number of physicians across the nation witnessed a void in physician leadership within hospital management and began creating physician-owned hospitals. Today, over 200 hospitals across the nation are owned and operated by physicians.

Physician-Owned Hospitals

The Numbers

200

Approximately 200 Facilities in the Nation

#1

The Nation’s Most Cost-Efficient Hospital

75

Approximately 75 Facilities Were Under Development


The Physician-Owned Hospital Models

Community Hospitals

Some physician-owned hospitals, such as Doctors Hospital Renaissance (DHR) in McAllen, Texas, serve as community (general) hospitals that provide every service of a large hospital, such as labor and delivery, ICU care and surgery.

DHR played a vital role in treating the community’s Covid-19 patients during the pandemic.

Click here to learn more about how one physician-owned hospitals has delivered over 110,000 babies and led its region’s Covid-19 response.

Specialty Hospitals

Recognizing that specialization in certain types of care can lead to greater outcomes for patients, specialty hospitals focus on and excel in certain specialties. In Texas, physician-owned specialty hospitals include cardiac, orthopedic, and children’s hospitals.

Specialization has played a critical role throughout
our nation’s health care history. Over time, cancer centers and children’s hospitals evolved into
specialized facilities in order to offer the most efficient and highest quality care possible.

Physician-owned hospitals specializing in cardiovascular and orthopedic care, among several specialties, represent the latest example of our nation’s health care system evolving to meet patient needs through specialization. 


Pinnacle Hospital in Indiana was identified as the nation’s most cost-efficient hospital in 2021.

Joint Ventures

Rather than spend valuable resources to defeat physician-owned hospitals, a large number of non-profit community hospital systems across the country chose to embrace the safety, quality, and innovation that physician-owned hospitals create and partnered with them in joint venture models.

Today, dozens of non-profit community hospital systems across the nation are partners with physician owners in joint venture models.

Various Levels of Ownership

The nation’s 200 physician-owned hospitals feature a variety of physician ownership levels.

In some cases, the physicians own 100 percent of the hospitals. In a number of other physician-owned hospitals, a non-profit community hospital system owns a majority of the ownership, with physicians holding some ownership.

Doctors Hospital at Renaissance was on the front lines of the Covid-19 during several pandemic surges along the Texas-Mexico border.


The Benefits of Physician-Owned Hospitals

High Quality & Patient Satisfaction

In FY 2017, seven of the top 10 hospital in Medicare’s value-based purchasing (VPB) program were physician-owned hospitals. In addition, 40 of the top 100 hospitals in the nation were physician owned.

Physician-owned hospitals comprised approximately 5 percent of the hospitals nationwide in 2017.

Increasing Competition

Physician-owned hospitals add much-needed competition into hospital markets around the nation. Hospital consolidation has accelerated across the nation, and physician-owned hospitals serve as a tool to create competition.

“With a pandemic underscoring the need for flexible, dynamic hospital capacity, now is the time for congressional correction of Section 6001, a provision contrary to the ACA’s goals of expanding access to care, improving quality, and promoting innovation.”

MedPAC’s Comments on Competition

The Medicare Payment Advisory Commission (MedPAC) made the following comments about competition to Congress in its 2005 report:

“Some proponents of specialty hospitals argue that competition with specialty hospitals improves community hospital operations. Some community hospital administrators admit that competition with specialty hospitals has had some positive effects on community hospitals’ operations. One community hospital administrator told us that the specialty hospitals were akin to a wake-up call – getting them to pay more attention to hospital operations and physician relations. We heard several examples of constructive improvements sparked by the entrance of a specialty hospital into a market, including extending service hours, improving operating room scheduling, standardizing the supplies in the operating room, and upgrading equipment.”

Community Benefits

Physician-owned hospitals pay taxes, which play an important role in the communities that they serve.

Also, many physician-owned hospitals provide uncompensated care.

Excepteur Sint Doctors Hospital at Renaissance was of the Covid-19 during several pandemic surges along the Texas-Mexico border.