Background The relationships between physicians and hospitals are viewed as central to the proposition of delivering high-quality health care at a sustainable cost. Over the last two decades, major changes in the scope, breadth, and complexities of these relationships have emerged. Despite understanding the need for physician-hospital alignment, identification and understanding the incentives and drivers of alignment prove challenging. Questions/purposes Our review identifies the primary drivers of physician alignment with hospitals from both the physician and hospital perspectives. Further, we assess the drivers more specific to motivating orthopaedic surgeons to align with hospitals. Methods We performed a comprehensive literature review from 1992 to March 2012 to evaluate published studies and opinions on the issues surrounding physicianhospital alignment. Literature searches were performed in both MEDLINE 1 and Health Business TM Elite. Results Available literature identifies economic and regulatory shifts in health care and cultural factors as primary drivers of physician-hospital alignment. Specific to orthopaedics, factors driving alignment include the profitability of orthopaedic service lines, the expense of implants, and issues surrounding ambulatory surgery centers and other ancillary services. Conclusions Evolving healthcare delivery and payment reforms promote increased collaboration between physicians and hospitals. While economic incentives and increasing regulatory demands provide the strongest drivers, cultural changes including physician leadership and changing expectations of work-life balance must be considered when pursuing successful alignment models. Physicians and hospitals view each other as critical to achieving lower-cost, higher-quality health care.