Government ownership in the U.S. hospital sector, which accounts for 5.3% of U.S. GDP, has steadily declined for decades. A key driver has been the privatization of hospitals owned by local governments. Theory predicts that privatization will improve hospital profitability, but may be socially inefficient. We test these predictions empirically by leveraging all 254 privatizations that occurred between 2001 and 2018. Privatization increases hospital profitability, eliminating the need for subsidies. However, we also find a reduction in access for Medicaid patients and an increase in mortality among elderly Medicare patients. On average, privatization generates $0.6 million in savings per additional death.