Physicians were traditionally prohibited from owning an interest in a hospital.
(There was always an exception for small towns in which the physician might
be the only person able to finance and oversee the hospital.) It was accepted
by a consensus of the profession that it would be difficult for physicians to
evaluate the need for hospital care objectively if they would financially benefit
from putting the patient in the hospital. The disappearance of this prohibition
does not result from today’s physicians’ being more objective than their
predecessors. It results from the increased profitability of hospital ownership,
which may intensify the potential conflict of interest. Such interested should be
disclosed and may also violate federal law.