State passes ‘1st in nation’ bill to block corporate control of radiology practices
Oregon recently passed what advocates believe is the first bill in the nation aimed at blocking corporate ownership of medical practices in radiology and other specialties.
Democratic Gov. Tina Kotek signed the measure into law on Monday, June 9, over the objection of opponents such as Amazon and the Oregon Ambulatory Surgery Center Association. In 1947, the state established the “corporate practice of medicine doctrine,” to ensure medical decisions are made by licensed professionals. This covered everything from how much money is spent on care, to staffing levels, time spent with patients and to whom physicians can sell their practice.
However, advocates contend private equity firms and other corporations have “exploited” loopholes by employing or contracting with physicians who are listed as owners to comply with the doctrine. Instead, these docs often “lack true control over the practice.” Senate Bill 951 closes this loophole, “restoring the intent” of the corporate practice of medicine doctrine and “protecting the integrity of patient care in Oregon.”
“We’re not reinventing the wheel here—we’re defending a principle that once made Oregon a leader in protecting patients,” Republican Rep. Cyrus Javadi said in a statement. “Back in 1947, we drew a clear line between who could own a clinic and who could practice medicine, because we understood that healthcare isn’t just a business, it’s personal. SB 951 updates that line for a world where private equity firms and management companies have figured out how to blur it. We owe it to patients and to the doctors who still believe in putting care first to draw that line again.”
In making their case for the legislation, state lawmakers cited a 2023 perspective piece. It contended that recent multibillion-dollar primary care investments by Amazon and CVS “could threaten equitable access,” raise costs and “reduce physicians’ clinical autonomy.” The bill limits control these companies can have in clinic operations and bans noncompete agreements used to prohibit radiologists and other physicians from taking jobs at different practices, the Oregon Capital Chronicle reported.
Support for the bill also stemmed from Optum’s acquisition of the Eugene-based Oregon Medical Group, the outlet noted. After the UnitedHealth company forced physicians to sign noncompete contracts, the surrounding area lost “dozens of doctors, leaving thousands of people without care,” according to the Chronicle.
“This bill is about preventing the kind of takeover that happened at the Oregon Medical Group in Eugene,” Democratic Rep. Lisa Fragala said in the same statement. “When we see consolidation in the healthcare market, we see three things happen: higher prices, negative effects on the quality of care and decreased access to care.”
The bill carves out exemptions for entities such as hospitals, tribal health facilities, behavioral health programs and crisis lines. It’s drawn praise from the Oregon Nurses Association and criticism from others including the local ambulatory surgery association, which spelled out its concerns in a March letter.
“We all agree that physicians should make the major healthcare decisions for their patients. We all agree that communities should be protected,” wrote association President Ryan Grimm, MBA, with the Portland Clinic. “However, the current draft of this bill could lead to clinic closures, challenges recruiting new physicians to Oregon, and higher healthcare costs for consumers.”
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.