Physician says states must close practice-ownership loopholes being exploited by private equity firms

A New York physician contends that states must close loopholes that are being exploited by private equity firms to acquire doc groups.

Rheumatologist Jason E. Liebowitz, MD, made his case in an opinion piece published by JAMA Internal Medicine on June 3. His letter came in response to a March study in the same publication, which found that most physicians surveyed have negative views about private equity’s involvement in radiology and other specialties.

In many states with laws against corporate ownership in healthcare, professional service entities are only allowed to practice medicine if they are owned by locally licensed physicians. However, Liebowitz contends that PE groups are dodging this requirement by putting a figurehead in place while a nonphysician “makes all important decisions and greatly influences patient care.”

“The key aspect that we as physicians should be focusing on is how PE firms are skirting laws that are in place to prevent undue influence of nonphysicians over the practice of medicine,” he wrote.

Liebowitz previously worked for a group that was eventually acquired by PE. After the deal, docs were required to sign a new contract that included a two-year, 100-mile noncompete clause. He was able to leave the organization and score a position with the Columbia University Vagelos College of Physicians and Surgeons. But the experience left a lasting impression.

“If we are to prevent worsening patient outcomes and increasing moral injury among physicians, we must close loopholes in state laws that allow for corporate ownership, prevent physician contracts from including restrictive provisions, including onerous noncompete clauses, and ensure that physician leaders and owners of practices are more than just figureheads,” he wrote. “In this way, we can create a sustainable and successful future for physicians and patients alike.”

You can read the entire letter here. Liebowitz also further discussed his feelings in an interview published by MedPage Today on June 4.

Marty Stempniak

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. 

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