Doc, You Don’t Actually Want to Own a Hospital
There’s an understandable appeal to the idea of physician-owned hospitals. If corporate healthcare is the problem, then why not cut out the middlemen? Why not run hospitals the way they should be—where patient care is the priority, doctors have autonomy, and the profit motive doesn’t dictate medical decisions?
It’s a logical assumption: if hospitals are failing patients and burning out physicians, then the solution must be to own the institution itself and reform it from within. But the unfortunate reality is that owning a hospital doesn’t free you from the system’s dysfunction—it just forces you to take responsibility for it.
Physicians who go down this path often learn hard lessons about who actually controls healthcare and why hospitals operate the way they do—not because they must, but because the financial structure demands it.
If you’re a doctor who’s ever thought, Maybe I should just run my own hospital, let’s talk about what you’d really be getting into.
You Think You Want to Own a Hospital Because You Want to Fix Medicine
Most doctors considering hospital ownership aren’t motivated by profit. They’re frustrated. They’re tired of administrators overriding medical decisions, insurance companies denying necessary care, and corporate consolidation treating them like labor inputs rather than professionals.
Physicians imagine that by running their own hospitals, they can:
Eliminate unnecessary bureaucracy
Make care decisions based on patient needs, not profit margins
Improve working conditions to prevent burnout
Set fair pricing and negotiate better insurance rates
These are good goals. The problem is, owning a hospital doesn’t allow you to opt out of the system’s financial constraints—it forces you to engage with them even more.
Let’s break down what happens when you try to own and run a hospital.
1. You Will Immediately Become an Administrator
Owning a hospital does not mean you get to practice medicine the way you want. It means you inherit all of the financial, legal, and regulatory burdens that make corporate hospitals what they are.
You’ll need contracts with insurers—who will offer you worse rates than they give to larger systems.
You’ll need to navigate Medicare and Medicaid reimbursement structures—which often pay less than the actual cost of care.
You’ll need to hire administrative staff—the very people you wanted to remove from decision-making.
This is why physician-owned hospitals often end up hiring the same consultants and administrators they once resented—because without them, the hospital collapses.
The first lesson of hospital ownership: You are not running a medical institution. You are running a financial operation that happens to provide medical care.
2. You Can’t Actually Set Your Own Prices
One of the most common reasons doctors want to own hospitals is to charge fair, transparent prices. But you don’t actually get to set your rates—insurers do.
Insurers negotiate prices based on leverage—and large corporate hospital systems have more leverage than you do.
If you don’t accept lower reimbursement rates, insurers will exclude your hospital from their network, cutting off most of your patient base.
Medicare and Medicaid reimburse at fixed rates—which means your hospital will be underpaid for most of the care it provides.
This is why physician-owned hospitals often end up prioritizing high-margin procedures (orthopedics, elective surgeries) while avoiding unprofitable services like emergency care, labor & delivery, and mental health treatment.
The second lesson of hospital ownership: The market decides what care is worth—not you.
3. Your Workload Will Be Financial, Not Clinical
Running a hospital means making financial decisions first, medical decisions second.
You will spend more time:
Negotiating contracts with insurers
Securing financing for hospital operations
Ensuring compliance with federal and state regulations
Managing staffing shortages and labor disputes
Meanwhile, your actual time spent practicing medicine shrinks—because now you’re running a business.
At some point, you will realize that:
To stay afloat, you need more patients per doctor per day.
To manage costs, you need to hire contract labor.
To maintain revenue, you need to prioritize high-reimbursement services.
The third lesson of hospital ownership: You’re not a doctor anymore. You’re an executive.
4. You Will Still Have to Cut Costs—Even If It Harms Patients
Private equity firms don’t cut staffing and push high patient loads because they’re evil. They do it because it’s the only way to make the numbers work.
You might think, I won’t do that. I’ll put patients first. But then reality hits:
Your hospital is losing money on Medicaid patients—but you can’t turn them away.
Your fixed costs (staff, equipment, real estate) don’t change—but revenue fluctuates.
You’re offering better working conditions—but losing doctors to higher-paying corporate hospitals.
At some point, you will have to cut staff, reduce appointment times, or outsource services—just like corporate hospitals do.
The fourth lesson of hospital ownership: You can’t run a financially solvent hospital while operating at a moral loss.
5. If You Succeed, You Will Either Sell Out or Become the Very Thing You Hated
Let’s say you defy the odds. You navigate all of these challenges and your hospital survives. Congratulations—now you face a new problem.
At some point, your hospital will hit a financial ceiling.
You need more funding to expand.
You need better insurance contracts.
You need economies of scale to compete.
There are two ways forward:
1️⃣ Sell to a larger hospital system or private equity firm.
2️⃣ Start making the same “hard choices” as corporate hospitals—maximizing billing, increasing patient volumes, and leveraging market share.
Either way, your hospital ends up back in the system you tried to escape.
The fifth lesson of hospital ownership: To compete, you must either consolidate or become a financialized institution yourself.
So What’s the Alternative?
The problem isn’t just who owns hospitals—it’s how hospitals are structured to survive. Physicians don’t need to own hospitals. They need structural changes that remove the financial constraints forcing hospitals to prioritize profit extraction over patient care.
What Would Actually Make a Difference?
Universal, standardized reimbursement rates (so hospitals aren’t forced to play revenue games).
Eliminating insurer market dominance (so hospitals can negotiate fairly).
Public funding for essential hospital services (so hospitals don’t need to cross-subsidize).
Physician leadership in clinical decision-making (without needing to also be financial executives).
Until these things change, owning a hospital won’t fix the problem—because hospitals don’t shape the market. The market shapes hospitals.
Physicians don’t need to own healthcare institutions to change healthcare.
They need to change the financial incentives that dictate how those institutions operate.
So no, you don’t actually want to own a hospital.
But you should absolutely want to change the system that makes you think you need to.