The Quiet Ban on Physician-Owned Hospitals
In most fields, we celebrate innovators and experts that start new firms and improve efficiency. In health care, we’ve forbidden it.
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Rhoads, J. "The Quiet Ban on Physician-Owned Hospitals" The Daily Economy. American Institute for Economic Research. November 2025.
In most sectors of the American economy, we celebrate the moment when insiders break away to build something better. Engineers start their own firms. Chefs open their own restaurants. Innovators leave incumbents and test their mettle in the market. Only in US healthcare do we treat that entrepreneurial impulse as a threat worthy of prohibition.
Section 6001 of the 2010 Affordable Care Act froze the growth of physician-owned hospitals (POHs) by barring new POHs from getting paid by Medicare and Medicaid, and by restricting the expansion of existing POHs. It did not ban POHs outright, but it had roughly the effect of a ban; after years of growth, the number of POHs in the US abruptly plateaued at around 230-250, and practically no new POHs have opened since 2010.
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