Witness Says AHA Sought Physician-Owned Hospital Ban; Calls It a 'Terrible Mistake'

An unidentified senator asked why the Affordable Care Act included a prohibition on physician-owned hospitals and whether repealing that restriction would be helpful.

Mr. Roy replied that "the American Hospital Association asked for it as a condition of their support for the bill." He summarized the stated policy rationale: a perceived conflict of interest in which physician-owners might refer patients to their own hospitals. "The policy argument the claimed policy argument was that there would be a conflict of interest if there were physicians owning hospitals, that they would refer people to their own hospitals and therefore steer people away from other hospitals," he said.

Mr. Roy told the committee that, in practice, the ban created a different dynamic: hospitals bought physician practices and gained control over referral volume. He called the ban "a terrible mistake" and said it "should be repealed." The transcript records the claim and reasoning but does not include supporting empirical data or any committee action to change the law during the session.