Hospitals in the United States are owned in several different ways: by nonprofit organizations, by investors and companies, by state and local governments, and by the federal government. According to the American Hospital Association, most community hospitals are nonprofit, with smaller shares owned by investors and by state and local governments. Ownership affects how a hospital is taxed, what it must report, how it handles financial assistance and sometimes which services it offers.
This guide explains the main ownership types. It is general information and not financial or legal advice.
The ownership types at a glance
| Ownership | Who owns it | Taxes | Key obligations |
|---|---|---|---|
| Nonprofit | A tax-exempt 501(c)(3) organization, often a health system | Generally exempt from federal income tax and often property tax | Section 501(r) financial assistance rules, community benefit reporting |
| Church-affiliated | A nonprofit linked to a religious body | Exempt, like other nonprofits | Same as nonprofit, plus any religious directives |
| For-profit (investor-owned) | Shareholders, private equity or private owners | Pay federal, state and local taxes | Accountable to owners and investors |
| Public | A county, city, state or hospital district | Government entity | Accountable to elected officials or a public board |
| Physician-owned | Partly owned by physicians who practice there | Usually for-profit | Federal limits on new physician-owned hospitals in Medicare |
Nonprofit hospitals
Nonprofit hospitals are organized under section 501(c)(3) of the Internal Revenue Code. They do not have shareholders, and any surplus must be reinvested in the organization's mission. In exchange for tax exemption, they must provide a benefit to the community.
Under section 501(r), added by the Affordable Care Act, nonprofit hospitals must:
- Have and publicize a written financial assistance policy
- Limit charges to patients who qualify for assistance to the amounts generally billed to insured patients
- Make reasonable efforts to determine eligibility before extraordinary collection actions such as lawsuits or credit reporting
- Conduct a community health needs assessment at least every three years and adopt an implementation strategy
Nonprofit hospitals report their community benefit spending on Schedule H of IRS Form 990, which is publicly available. Community benefit includes charity care, unreimbursed costs of Medicaid, health education and research. See Hospital Financial Assistance and browse nonprofit hospitals.
Church-affiliated hospitals
Many nonprofit hospitals have religious roots, including Catholic, Adventist, Baptist, Methodist, Lutheran, Presbyterian and Jewish health systems. Catholic hospitals in particular follow the Ethical and Religious Directives for Catholic Health Care Services, issued by the US Conference of Catholic Bishops. These directives can affect services such as contraception, sterilization, some fertility treatments and some end-of-life options. If these services matter to you, ask in advance. Browse church-affiliated hospitals.
For-profit hospitals
For-profit, or investor-owned, hospitals are owned by publicly traded companies, private companies or private equity firms. They pay income and property taxes and aim to earn a return for their owners. Many are part of large national chains.
For-profit hospitals are not subject to section 501(r), but they must follow the same federal patient protection laws as other hospitals, including the Emergency Medical Treatment and Labor Act (EMTALA), the No Surprises Act and price transparency rules. Many offer discount or charity programs, and some states require all hospitals to provide financial assistance. Browse for-profit hospitals.
Public hospitals
Public hospitals are owned by government bodies, such as counties, cities, states or special hospital districts. Many serve as safety-net hospitals, providing a large share of care to uninsured and Medicaid patients, along with trauma, burn and psychiatric services that may not be available elsewhere. Some are major teaching hospitals. Funding often comes partly from local taxes. Browse public hospitals.
Federal hospitals, such as VA hospitals, military hospitals and Indian Health Service and tribal hospitals, are a separate category serving specific populations.
Physician-owned hospitals
In a physician-owned hospital, doctors who refer patients there also hold an ownership stake. Many focus on surgery, orthopedics or cardiac care. The Affordable Care Act generally prohibited new physician-owned hospitals from participating in Medicare after 2010 and limited expansion of existing ones, with some exceptions. Hospitals must disclose physician ownership to patients. Browse physician-owned hospitals.
Does ownership affect quality or cost?
Research on ownership and quality is mixed, and results depend on the measure, the time period and the market. Some studies find differences in prices, staffing or the mix of services, but there is no simple rule that one type always delivers better care. For your decision, the hospital's own quality data for your type of care, its network status with your insurer and its financial assistance policy matter more than ownership alone. See How to Choose a Hospital and How CMS Star Ratings Work.
What stays the same regardless of ownership
- Hospitals that participate in Medicare must meet the Medicare Conditions of Participation.
- Hospitals with emergency departments must follow EMTALA.
- Patients have the same HIPAA rights to their records. See How to Request Your Medical Records.
- The No Surprises Act protections apply.
- Hospitals must post price information under the federal price transparency rule.