Is it legal for a doctor to invest in the hospital that he works for?

UPDATED: Oct 1, 2022

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Is it legal for a doctor to invest in the hospital that he works for?

Most of my doctors work for the same hospital. Some are invested in the same hospital. Would these doctors when requiring a test or procedure which may or not be necessary just be adding to their dividends?

Asked on July 25, 2018 under Business Law, Indiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

No, it is not illegal for a doctor to invest in a hospital he works for or with, any more than it is illegal for a doctor to invest in (i.e. own) his medical practice. Yes, there could be a conflict of interest in that a doctor might order a test more for the payment the hospital would receive than any other reason--but you *always* run the risk of such a conflict, since a doctor with a solo practice whom you see could order an unnecessary test in order to bill you or get a payment from your insurance or Medicare/Medicaid.

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