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The Merger of Government and Religion


Elizabeth Sepper (@lsepper) is Professor of Law at the University of Texas at Austin School of Law.

James D. Nelson (@ProfJDNelson) is the Vinson & Elkins Professor at the University of Houston Law Center.

As regular readers of the LPE Blog know, the United States is experiencing a resurgence of concentrated economic power in contexts ranging from housing to labor to corporate governance. Perhaps nowhere is this more evident than in healthcare, where ninety-five percent of metropolitan areas have highly concentrated hospital markets, and not one is considered competitive—raising worries about the domination of employees, patients, and community members. But with a few notable exceptions, LPE scholars have overlooked that alliances between religious and economic conservatives have often played a role in these arrangements, generating transfers of public funds, services, and decision-making away from more democratic institutions.

In a new article, we show that church and state have merged, formed joint ventures, and contracted to set up public, yet religious, hospitals across the country. These hospitals are state governed, state run, and/or state owned. But religion permeates their halls, and faith dictates mission and denial of patient care. Leadership positions, typically open to all in public hospitals, are reserved for individuals from particular sects. Political and economic power are now deployed in accordance with religious dictates.

“Government’s religious hospitals” confound every dimension of the line between public and private. Understanding their origins requires weaving together histories of political economy and religion law. And to prevent, undo, or mitigate the risks of these arrangements demands innovative use of LPE’s tools—antitrust, public utility regulation, and public options.

The Rise of Public-Religious Hospitals

In 2020, Jesse Hammons, a transgender man, was scheduled for a hysterectomy at a hospital owned by the University of Maryland Medical System (UMMS). However, roughly a week before the operation was set to take place, it was abruptly cancelled. Hammons alleges that the chief medical officer told his surgeon that, “according to University of Maryland St. Joseph Medical Center’s religious beliefs, Mr. Hammons’s gender dysphoria did not qualify as a sufficient medical reason,” and so the procedure would violate the hospital’s avowed religion.

UMMS—an instrumentality of the state—had purchased St. Joseph a decade earlier. But the hospital continues to be an officially designated Catholic hospital. Until recently, a visitor to its website would find that the hospital’s mission is “guided by our Catholic heritage” and “[r]espect for all people as God’s loved children.” They would also learn that the hospital was an “[i]ntegral member of the University of Maryland Medical System.” The state had explicitly committed to the application of religious teachings. And so government employees were bound to treat patients in accordance with religious doctrine, with oversight from the Church.

And UM St. Joseph is not alone. Other states now own religious institutions outright—like the University of Alabama’s “faith-based health system” with a mission of “witness[ing] to the love of God through Jesus Christ.” Sometimes, the religious and state entities are instead joint venturers—like Trinity Health and the University of Michigan, which run a hospital consistent with the teachings of the Roman Catholic Church. At other times, a dense network of operational, managerial, or other relationships connects church and government—as at the University of Texas, the University of California, and numerous public health districts, where clinical staff and medical students must comply with religious teachings against abortion, contraception, fertility treatments, and LGBTQ-affirming care.

Although these institutions operate along a spectrum of church-state fusion, they share some commonalities. First, the religious identity is usually Catholic, because four of the ten largest hospital systems boast Catholic affiliation. Second, they each involve aspects of publicness and religiosity—in ownership, administration, governance, or care. Third, whether government-owned, -operated, or -administered, these institutions combine economic power with religious domination and then add the authority of the state. In doing so, these hospitals defy the deeply ingrained and constitutionally grounded expectation that governments will not own or be subject to the control of religious institutions, and that religious entities will not fly the banner of government or grant state bureaucrats decision-making authority.

So how did we get to this point? From the Reagan administration to today, policymakers favored privatization over democratic institutions and austerity over social investment. Not long ago, public hospitals were important urban and rural institutions. But by the early 2000s, the ascendance of neoliberal policies had decimated public hospitals. Many had closed their doors. Various degrees of privatization crept into those that remained.

During the same period, nonprofit hospitals—encouraged to act like for-profits—dropped unprofitable service lines and cream-skimmed well-insured patients, further disadvantaging public hospitals. They consolidated into mega healthcare systems. The result was a hospital market without much in the way of competition.

As the 2000s wore on, governments seeking homes for academic medicine or hospital partners had few options. Public hospitals, which once served as the primary home of academic medicine, were increasingly scarce, while religious healthcare systems were often among the few potential partners. Outnumbering institutions affiliated with all other faiths combined, Catholic systems were most likely to remain.

If this had taken place during the 1990s, government lawyers might have raised some serious Establishment Clause concerns. The twentieth century Supreme Court subscribed to a light version of separationism. State funding had gone to religiously affiliated hospitals since the mid-1800s, but that aid was constrained—the institution had to be non-sectarian; the funding could not flow primarily to religion or to a single religion; and the state and religious actor could not become excessively entangled. But over the past few decades, and in particular since 2000, the Supreme Court has dismantled those guardrails. Driven by economic need, state and local governments stepped into constitutionally unsettled space.

Preserving Secular Social Services

Government-religious hospitals pose a significant challenge to a constitutional system in which equal membership in the political community is not supposed to depend on one’s religion. What legal and policy tools might we use to mitigate and prevent the harms of church-state fusion in hospital markets?

First, prophylactic antitrust enforcement would indirectly generate some measure of religious pluralism and bolster availability of health services. Most straightforwardly, more competition would mean more choices for state healthcare partners and wider options for patients and providers. Second, we might just accept existing consolidation and treat hospitals, or perhaps healthcare systems, as public utilities. There is a strong case for treating hospitals this way. They meet basic human needs, hold economic power in a poorly functioning market, and maintain a stranglehold over vital services. While nominally private, most hospitals receive the majority of their revenue from public funds.

Finally, restoring and expanding the public provision of healthcare could ensure secular space while helping address concerns about privatization and access. In our article, we discuss one example, from the University of Louisville, where state and local governments have taken back the public hospitals. A less expensive option would be to create a hospital-within-a-hospital for reproductive care. Or governments could radically rethink what the public’s health requires, perhaps investing in Great Society-style community clinics.

Beyond these particular solutions, there is a broader need for LPE scholars to grapple with the realities of a religionized political economy. In many cities, faith-based organizations are the sole providers of emergency shelter for unhoused people, a service funded by and often explicitly the duty of local governments. Prison systems have dedicated faith-based units or entire facilities. Public school districts have assigned students who have been expelled or suspended to Christian disciplinary schools. The school choice movement has set its sights on public religious charter schools. And the Christian nationalist movement aims to transform “the seven mountains”—defined to mean all sectors of government, education, and business—into explicitly conservative Christian institutions.

The perils of privatization, including removal of democratic oversight and decision-making, are aggravated by escalating solicitude for religious institutions that demand exemption from insurance mandates, retirement regulations, public health regulations, and employment protections. With a sympathetic Court willing to deploy increasingly favorable constitutional doctrine, their claims threaten to entrench the power of large economic institutions over workers, patients, and local communities. A more democratic political economy will require taking stock of religion’s legal, political, and economic ascendance.