Tackling healthcare consolidation through ownership transparency

When a Texan walks into a doctor’s office, they expect their care to be guided by their health needs, not by corporate ownership structures they can’t see.

As hospital systems grow through mergers and acquisitions, ownership structures become harder to track, referral incentives become harder to detect, and consolidation becomes harder to address. When a physician is employed by or financially affiliated with a hospital system or insurer, financial incentives may be shaping care in ways the patient cannot see.

Texas patients and employers need the information to make better decisions about their care, and Texas has the opportunity to provide it. Policies that provide transparency of ownership and control are the foundational reform that gives patients, employers and policymakers the information they need to hold all members of the healthcare industry accountable.

What is Transparency of Ownership in Healthcare?

The question of who owns or controls a physician practice, hospital, insurer or health system — and their vested financial interests — can impact prices charged, services offered, referrals made, quality, and access to care. Yet it can be hard to know which entities own or control a healthcare practice, facility or benefit plan.

Layered and interrelated corporate structures can make it genuinely difficult to trace who is ultimately in control of a hospital or practice. Unfortunately, the data infrastructure to answer that question publicly and comprehensively does not exist. It bears repeating: No complete, publicly available data source covers ownership information for healthcare practices in Texas.

Ownership transparency policies address this gap by requiring healthcare entities to publicly disclose corporate affiliations, subsidiary relationships, ownership interests and contractual control arrangements. While transparency alone cannot prevent consolidation, it provides insights into changing healthcare markets and can serve as the foundation for additional strategies to address consolidation and rising healthcare prices.

Texas Has a Starting Point

During the 89th legislative session, Texas began grappling with the question of ownership transparency, approaching it from two angles.

• House Bill 2747 focused on the transactional side, requiring healthcare providers to notify the Texas Attorney General at least 90 days before any transaction effecting a material change in control.
• HB 4408 took a broader disclosure approach, requiring a broad range of healthcare industry entities to report ownership, investor and contractual control information to the Texas Secretary of State annually and following material change transactions, with that information made publicly available.

Both bills shared the same underlying goal, giving the state a clearer picture of who controls Texas healthcare markets. Neither became law, but the conversation they started is worth continuing.

As committees have begun holding hearings on interim charges, organizations such as the Texas Conservative Coalition Research Institute are increasingly discussing this issue. Passing transparency of ownership legislation would give Texas something it currently lacks: a reliable, comprehensive data foundation that documents the true extent of consolidation in the state’s healthcare markets and positions policymakers to respond to it.

Why This Matters: Two Distinct Problems

Patients deserve to know who their doctor works for.

In our 2024 Texas Voter Poll, 91% of Texans agreed patients should know who owns their doctor, hospital and insurer. That consensus reflects something fundamental. Patients cannot make informed decisions in a market they cannot see.

In a recent Texas House Insurance Committee hearing, state officials from the Teacher Retirement System of Texas described the challenge of steering patients toward lower-price, higher-value care.

The core problem: patients go where their doctors send them. As one official put it plainly, they are trying to steer people to high value care, but it is difficult as patients are “tending to go where their doctors tell them to go.”

When a physician is employed by or financially affiliated with a hospital system, referral patterns can reflect that relationship, more so than the value of care to the patient. Patients who do not know who their doctor works for or may be otherwise financially incentivized have no way to account for that possibility. Ownership transparency is the prerequisite to informed, empowered patients.

Consolidation is reshaping Texas hospital markets, and patients are paying for it.

According to a recent Kaiser Family Foundation analysis, one or two health systems controlled the entire inpatient hospital care market in nearly half (47%) of metropolitan areas nationally in 2024.

Texas reflects this pattern. Nine Texas metro areas (Amarillo, Abilene, Midland, Odessa, San Angelo, Laredo, Eagle Pass, Victoria and Corpus Christi) only have one or two hospital systems. Out of these areas, three of them (Abilene, Amarillo and Eagle Pass), only have one.

Even in larger markets, the number of health systems can create an illusion of competition. Some Texas metro areas appear to have more competition on paper, with three or four hospital systems, yet market power can be just as concentrated in practice. In the Austin metro area, with 2.6 million residents and four health systems, two systems controlled 89% of the inpatient market.

The pattern repeats elsewhere:

• in Bryan, two of three systems control 99%
• in Lubbock, two of four control 96%.

Having multiple systems on paper does not mean meaningful competition exists in practice. The remaining systems can lack the bargaining leverage to create downward pressure on prices in insurer negotiations, potentially leading to higher prices despite the appearance of competition.

Transparency of Ownership is the Necessary First Step

While numerous potential policy paths exist for tackling consolidation, many of the heavy-handed approaches seen in other states steer away from the market-driven principles that Texas prefers.

Rate setting hands the government the pen and tells the government, rather than the market, to set prices. Some states have gone straight there, but for a market-oriented state it will likely be the last tool reached for, not the first.

Forced divestiture is blunter still: legally messy, slow and adversarial, it asks the state to unwind deals after the fact instead of making the market work better in the first place.

Both options also assume the state already knows exactly where the problem sits and how big it is.  Across most of Texas, it doesn’t.

That’s the case for transparency. It comes before the hard judgments rather than substituting for them. And it does real work to help solve both problems identified above.

For patients, it puts the conflict of interest in plain sight. A patient who knows her doctor is employed by a hospital system has every reason to ask a sharper question when she’s referred to another provider inside that same system.

Will that actually change where patients end up? We don’t know yet, and it would be a stretch to promise it. But the underlying point is hard to argue with: a patient is better off knowing who her doctor works for than not.

For policymakers, transparency does two things, potentially with a larger impact than the patient piece. First, it establishes the basic facts — who actually owns and controls what, market by market — that the state simply does not have today. You can’t regulate a market you can’t see.

Second, it builds the dataset that makes a scalpel possible instead of a sledgehammer. If the problem is a handful of actors with too much share, ownership data lets the state limit its regulation to only the actors above a certain market share, without piling new rules on every competitor trying to take them on.

That’s the whole point: transparency isn’t just the least intrusive option, it’s also what makes the smarter, lighter-touch options possible at all.