The changes happened fast when Optum, a subsidiary of insurance giant UnitedHealth Group, bought Oregon Medical Group, recalled Dr. Nicholas Jones.
“More and more work fell on fewer and fewer people,” he said of his experience working for the clinic chain a few years ago.
Now, concern over the growing corporate influence on care, and its effects on patients and providers, is growing nationally. And Oregon is on the cutting edge of a backlash.
State Rep. Ben Bowman’s closely watched legislative effort to tackle the problem in medicine triggered opposition from health care giants and died earlier this year — and he’s since been laying the groundwork for another try in 2025.
Corporations, Bowman said, are focused on the bottom line, “whereas doctors also have an ethical duty to patients.” His hope, he added, is to ensure “physician independence.”
A panel discussion Wednesday between Bowman, now House majority leader, Jones and others highlighted the challenges of responding to an economic transformation that has many facets. The event was hosted by the Oregon Health Forum, an affiliate of The Lund Report.
Effects on patients, provider debated
Years ago panelist Mike Shirtcliff founded what became known as Advantage Dental, a dentist cooperative that served patients through the low-income Oregon Health Plan. But as the dentist-owners got older they wanted to sell, and DentaQuest bought the company in 2016.
“All of a sudden it wasn't about it wasn’t about patient care anymore,” Shirtcliff said. “It was about how do we get a return on investment.”
Bowman’s bill won’t affect dental ownership. But Shirtcliff said changes dentists have seen in Oregon bear lessons for other providers.
“We don’t address the root cause in this bill, and the root cause is really important.”
Nationally, there’s been increasing concern about UnitedHealth and other health care giants taking over practices, with potential effects that include price-fixing and care dictated by algorithms, not doctors.
Earlier this year, UnitedHealth Group completed a hotly criticized purchase of the Corvallis Clinic, dodging a state regulatory review by citing the clinic chain’s dire financial situation.
So many doctors left the Oregon Medical Group after its earlier purchase by Optum that the company began cutting off treatment for patients. The company’s non-compete agreements contributed to a regional primary care shortage that drew attention from lawmakers.
Jane Zhu, an associate professor of medicine at Oregon Health & Science University who’s gained a national profile in researching corporatization of care, told the audience there are arguments that corporations may bring efficiencies that help patients, and it is difficult to say whether corporate ownership of medicine is inherently good or bad.
A better question is what policies can curb the trend’s “worst outcomes,” she said.
New approach
Bowman’s bill tries to beef up Oregon’s limited ban on corporate ownership of physician practices in ways that other states have not. Among other things, it would address the role of so-called “management service organizations” — companies that contract with medical practices to handle paperwork or even provide expensive equipment, such as machines used by oncologists.
Bowman, a Tigard Democrat, said that he’s not against management service organizations and can be positive by freeing up doctors to focus on care. But he said private equity has used management service organizations as a backdoor to control how doctors practice care.
Many independent medical practices use management service organizations in a way that does not affect clinical decisions, said Brian Kelly, CEO of Women’s Healthcare Associates, a Portland-based medical group.
Management service organizations “bring a lot of talent (and) a lot of knowledge” to business investments and should have a return on their investment, he said.
Uneven playing field drives trend
The reasons behind the trend toward consolidation and corporate influence over medicine are many, the panelists said.
Zhu said independent clinics have had to stay afloat with Medicare payments and other reimbursements remaining flat or effectively declining because of inflation. Meanwhile, independent practices have to compete with hospitals and health systems that are exempted from the state’s ban on the corporate practice of medicine. The federal government pays them far higher reimbursement rates than it does independent practices — sometimes as much as double.
“There’s concerns that right now we’re facing a behavioral health crisis, and there needs to be access. And maybe if we restrict capital coming into the state, it’s going to cause worse access.”
Not only does that drive consolidation — which in turn drives higher costs — but when hospital systems merge they can restrict patient choices for independent practices and have more leverage in negotiating rates, she said.
Jones, the former Oregon Medical Group doctor, noted that part of the problem for independent practices is the increasingly complex nature of the health care system itself, which he called “this pay to play model where you need a multi-million-dollar medical record system to track value-based care, or dozens of staff between billing departments, coding departments, authorization departments, all this stuff.”
Bowman hones approach
Bowman said that several work groups of interested parties have been working on aspects of his legislation as the 2025 legislative session approaches.
Bowman acknowledged that practices sometimes need help from management service organizations to fund needed technology and equipment. But he said his bill will prohibit the management organizations from telling doctors how to use that equipment, how many patients have to go through it in a day, and who qualifies to have the equipment.
“Those are medical decisions that should be made by doctors,” he said.
He added that his bill does not seek to prevent outside investment into medical practices, and its narrow provisions will not regulate hospitals nor behavioral health.
The reason for excluding behavioral health, Zhu said, shows how complicated the issue is.
“There’s concerns that right now we’re facing a behavioral health crisis, and there needs to be access,” she said. “And maybe if we restrict capital coming into the state, it’s going to cause worse access.”
But, she added, “if we’re excluding behavioral health, how does that play into other specialties in rural areas or serving particular populations? We don't know yet the unintended consequences of that.”
“Shine a light on it, and let’s look at it.”
Bowman conceded his bill tackles only a part of a complicated problem.
“We don’t address the root cause in this bill, and the root cause is really important,” he said.
That root cause, he said, is the profit incentive, which he said also needs to be undressed. Otherwise, he added, “you’re actually opening the door for more corporate control and consolidation.” To that end, he said he is sponsoring a companion bill addressing administrative burdens, while offering tax credits to independent practices.
Other possible solutions
The panel touched on other possible ways to address corporate influence on medicine as well as consolidation itself.
While the problem of federal reimbursement driving consolidation has been known for more than a decade, there appears to now be bi-partisan interest in tackling it.
Bowman said he also expects there to be legislation in the state Senate concerning the problem of disparate payments.
He and others discussed potentially beefing up the authority of Oregon’s health care merger review office. All large mergers and acquisitions between health care companies must be approved by the Health Care Market Oversight program. But its powers are limited.
Jones, the doctor, said he thinks offering primary care as a basic benefit, like food stamps, could free doctors to practice care appropriately. “That access to primary care is where you’re really going to save money. It’s where you’re going to reduce costs, it’s where you’re going to increase access,” he said.
Shirtcliff, who described himself as a “good Republican,” praised Bowman for the open discussion around his bill, but said more transparency is needed in the health care system itself.
“Shine a light on it, and let’s look at it,” he said.
