The hospital industry is already subject to exten sive regulation covering, in varying degrees: construction or ex pansion of facilities; review of rates; quality of care; wages and labor relations; criteria for tax exemption; qualification for Medicare and Medicaid, and for Hill-Burton construction funds; and other matters. There are, however, many serious shortcomings in the present mishmash of uncoördinated, incon sistent, and often contradictory laws and regulations. The time has clearly come for a systematic overhaul of the entire apparatus—an overhaul designed to recognize the changing role of the hospital in a changing health care system. The hospital industry—especially its principal spokesman, the American Hospital Association—recognizes this need and is recommend ing public utility status for the hospital, with regulation by an independent state agency under federal guidelines. Advan tages and disadvantages of this approach are briefly noted. An alternative concept, the "franchised" hospital, is suggested.