Should Congress discourage physician-owned hospitals?

Since the ACA began blocking the formation and expansion of physician-owned hospitals, "hospital consolidation has accelerated, an increasing share of physicians has been absorbed into large hospital systems, and hospital prices have skyrocketed, far outpacing inflation," Hall writes.

Removing the ACA restrictions "would restore a pathway for choice and competition to improve care quality and affordability," Hall adds. "Any lingering concerns do not justify maintaining a blanket prohibition on physician ownership."

What it means: Paragon was founded by economists who had worked for Donald Trump's first presidential administration and some of the most conservative House Republicans.

Past Paragon commentaries have given readers clues about what Republicans in Washington would be talking about next.

The appearance of Hall's new physician-owned hospital commentary could be a sign that physician-owned hospitals are about to get more attention in the House.

For employers and benefits advisors, a surge in debate about physician-owned hospitals could resemble the current debate over regulation of pharmacy benefit managers' relationships with independent pharmacies. Employers and benefits advisors may be sympathetic to the arguments of physicians who want to own hospitals while being wary about what the owners of other hospitals are saying about the possible effects on those hospitals' finances.

The history: Physicians once owned a majority of the hospitals throughout much of the United States.

But in the early 2000s, when the legislation that eventually formed the ACA was being debated, critics at the American Hospital Association and other organizations argued that physician-owned hospitals were hurting other hospitals, by focusing on the most profitable procedures and serving the healthiest, most affluent patients.

Related: Doctor-owned hospitals not guilty of 'cherry-picking' patients

The Federation of American Hospitals and the AHA joined in 2025 to back the release of an analysis supporting the argument that letting physician-owned hospitals start up and expand in rural communities would "risk the financial viability of existing full-service sole community hospitals" by siphoning off commercially insured patients.

Hall's case: Hall contends in her commentary that the ACA restrictions on physician-owned hospitals were "likely less about evidence than about political pressure from the hospital lobby, which had a clear interest in suppressing a new source of competition."

The Centers for Medicare & Medicaid Services has not found that physicians are more likely to refer patients to hospitals that they own than to hospitals that serve as their employers, and researchers have found no evidence that the existing physician-owned hospitals are taking the most profitable patients away from other hospitals, Hall writes.

In places where physician-owned specialty hospitals are increasing their share of the hospital services market, community hospitals appear to be maintaining stable profit margins, Hall says.

Meanwhile, Hall says, hospitals not owned by physicians are buying huge numbers of physician medical practices.

"Giving physicians another structure in which to organize and practice — one in which they maintain ownership and governance — could help them remain outside of large hospital systems and reduce the frequency of hospital acquisitions of independent practices," Hall says. "This could be particularly significant for inpatient services, where independent physicians currently have few options to practice outside of hospital systems."