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What killed the Oregon effort to curb corporate medicine?

Concerns over big business in health care propelled a rookie lawmaker’s bill through the House before opponents entangled it in delay, objections
Private equity and large corporations have a complicated and not always noticed presence in health care. A bill limiting the corporate practice of medicine failed to pass the Oregon Legislature despite broad support. | SHUTTERSTOCK
March 12, 2024

This article has been updated with comment from Sen. Deb Patterson. 

Broad support for a bill to curb corporate influence on the practice of medicine was not enough to pass it into law during the recently concluded legislative session. 

But in the wake of the session’s end,  explanations for the bill’s demise varied, with some pointing to delay tactics from corporate lobbyists and Senate Republicans, others to a lack of process — and still others to the bill itself.

House Bill 4130 was arguably the most high-profile health care-related bill considered by the Legislature, drawing national attention.

The bill sought to tighten and expand Oregon law that bans corporate ownership from determining how health care is delivered. If passed, it would have had sweeping effects on the business of health care in Oregon — albeit it allowed for a delayed seven-year implementation period.

It easily passed the House with bipartisan support after a mostly positive committee hearing. But the bill encountered tougher criticism in a Feb. 26th hearing of the Senate Committee on Health Care, causing it to be sent to the leadership-controlled Senate Rules Committee rather than the Senate floor.

Lobbyist opponents were granted a Feb. 28 meeting by Senate President Rob Wagner’s office where they drove home their case, The Lund Report has learned. In the Senate Rules Committee it was amended and voted out on March 4, where it died on Wagner’s desk, never reaching the Senate floor. A spokesperson for Wagner said he was unavailable for an interview.   

State Rep. Ben Bowman, a Tigard Democrat and the bill’s chief sponsor, told The Lund Report that there wasn’t enough time to the five-week short session to overcome what he described as delay tactics by Senate Republicans. 

But he said the bill’s core aim of preventing corporations and investors from putting profits before patients resonated with a broad coalition that included many medical professionals and Republicans.  

“I think a lot of people agree that it's concerning that in some cases doctors’ independent judgment is not able to be exercised because of restraints put on them by corporate owners,” he said. 

State Rep. Rob Nosse, a Portland Democrat who chairs the House health committee, told The Lund Report that the bill regarding the corporate practice of medicine was bound to attract opposition from lobbyists.

“I just think there was just enough doubt planted (about it),” said Nosse. 

Former Gov. John Kitzhaber, who testified on behalf of the bill, told The Lund Report that corporate-backed delay tactics contributed to its death. 

“It died what I would call a ‘processed death,’” Kitzhaber said in an interview. “It didn't die for lack of political support.”

Bowman said he’s optimistic about the policy and the coalition that developed around the bill. He plans to try again in 2025. 

“It died what I would call a ‘processed death,’”

Just enough doubt

HB 4130 would have required licensed health care providers to maintain controlling stakes over their medical practices, limiting the influence of investors or other large corporations over their operations. 

The bill’s chief aim was to stop practices by investors and large companies from taking control over medical practices, and slow private equity from gaining a larger foothold in Oregon. The legislation included exemptions for hospitals, telemedicine companies, long-term care, in addition to behavioral and addiction treatment providers. 

Bowman and other backers — including former Gov. John Kitzhaber and former Oregon Health Authority Director Bruce Goldberg — pointed to research suggesting investors put profit over patient care.

The vast majority of the over 400 people or organizations who submitted testimony on the bill were in support, including the Oregon Medical Association, Oregon Nurses Association and Service Employees International Union Oregon State Council. 

State Rep. Cyrus Javadi, R-Tillamook, told The Lund Report he cosponsored the bill because he wants to prevent health care decision-making from becoming centralized in either a government or a corporate-run system. He said he was surprised by Republican opposition to the bill that arose in the Senate.

“It ran into trouble as people started to read the bill and not the bumper stickers,” Tom Holt, a health care lobbyist, told The Lund Report. “It was a big sprawling bill.” 

Ben Bowman
State Rep. Ben Bowman and former Gov. John Kitzhaber testify in favor of a bill on the corporate practice of medicine before the Senate Health Care Committee in February. 

Reportedly, those questions were driven by a campaign by private equity-backed corporate opponents to turn out Oregon providers to register objections by email and phone.

The strongest opposition came from doctors who contract with outside corporations to outsource increasingly complicated administrative work that comes with running a medical practice. Doctors concerned that the bill would upend this arrangement showed up with other opponents to a Senate Health Care Committee hearing on the bill in February.

During the hearing, Kitzhaber dismissed opposition from the doctors, suggesting they were acting on behalf of investors and corporations they had ties with. State Sen. Deb Patterson, a Salem Democrat who chairs the panel, only allowed a few opponents to testify before closing the public comment period and the hearing.

Opponents used the handling of the hearing to raise process concerns against the bill, citing the fact that some opponents were never given the chance to testify despite having traveled long distances to do so. 

“It ran into trouble as people started to read the bill and not the bumper stickers,”

Testimony from opponents raised concerns that the bill would limit medical practices from using management service organizations, companies that handle paperwork and other administrative tasks. Critics say these arrangements give corporations a backdoor to controlling medical practices. Some physicians say the concern is overblown. 

Jim Ashby, CEO of Community Care Partners, told The Lund Report afterward that the hearing was rushed and that lawmakers didn’t adequately hear from opponents. His Eugene-based company operates 90 clinics in seven states and has used private equity funding to build new ones. It currently is considering five projects in Oregon, he said.

Ashby said in a follow-up email that he heard about the bill from the company’s regulatory counsel shortly before the Senate hearing. 

“When I began inquiring of other providers in the state, very few of them knew about it,” he said. “I honestly was surprised how it managed to get through the House as far as it did without hearing from a larger contingency who could offer an alternative set of facts than Bowman and the former governor and some members of the House were relying upon.”

Patterson told The Lund Report she didn’t expect there to be much opposition to the bill in the Senate after it easily passed the House. The bill landed in the Senate Health Committee the same week it had to hold hearings and votes on six other bills in order to meet legislative deadlines, she said.  

“I think the big problem was that the process was such during the short session that there is not enough time to actually manage the number of bills that come over from the other chamber,” she said. 

She tried to work with both the bill’s backers and opponents so that the hearing would include a broad cross section of people. But she said opponents sent one panel to testify that came completely from Compass Oncology. She also said that Kitzhaber’s testimony on the bill was long and tried to give opponents more time. 

Patterson said she knew people were upset that they didn’t have a chance to testify, and she supported moving the bill to the Rules Committee for more time to consider it. 

Republican senators argued the bill was too complicated and had too much potential for unintended consequences to be adequately considered during the five-week short session. They also complained that opponents didn’t have enough time to testify. 

After the hearing, the Senate Health Care Committee voted 3-2 on a party-line vote to send the bill to the floor with a recommendation that it pass. Bowman said the bill had enough support in the Senate to pass. 

But instead of sending it to the floor, Senate President Rob Wagner referred it to the Rule Committee, which does not have the same deadlines as other committees and sometimes the landing place for complicated or controversial bills. 

While in the Rules Committee, state Sen. Cedric Hayden, R-Fall Creek, unsuccessfully tried to replace its provisions with a task force on the issue. Hayden did not respond to a request for comment from The Lund Report. 

The Senate Rules Committee voted in favor of the bill on March 4, the Monday of the last week of the session. But Senate Minority Leader Tim Knopp signaled Republicans would file a minority report on the bill, a procedural move that could delay the bill from going to the floor for a second reading.

Under Senate rules, bills receive a third reading the following day, after which they can be voted on. That requirement can be suspended with a two-thirds vote. Since the bill had been amended in the Senate, it still needed to go back to the House for another vote.

Kitzhaber, who served as Oregon Senate president between 1985 to 1993 before being elected governor, said that in terms of legislative rules,  the bill conceivably could have made it to the floor before adjournment if it enjoyed sufficient support. He pointed out the bill was sent to the Senate Rules Committee on March 1, didn’t get a hearing until March 4 and was on the Senate President’s desk at the time of adjournment.  

“We had a bill with bipartisan support and had enough support in the chamber. But because of the delay tactics like that, the timeline just didn’t work,"

“That seems like a process issue,” said Kitzhaber, who added that he’s a “big fan” of Wagner. 

Up until the session adjourned, Bowman said he was lobbying lawmakers to pass the bill but increasingly realized it was becoming more of a long shot

“We had a bill with bipartisan support and had enough support in the chamber,” said Bowman. “But because of the delay tactics like that, the timeline just didn’t work.”

Despite the Republican-sparked delay, the bill could conceivably have still won passage, according to some observers. But the session ended the evening of March 7, three days before its scheduled final day of March 10.  

Nosse said that legislative leaders wanted to end the session on a good note after the acrimonious 2023 session that was marked by a Republican-led walkout. Keeping lawmakers there longer to work on controversial issues could have changed the session’s tone, he said.

Shortly after adjournment, House Speaker Julie Fahey mentioned the bill during a March 7 press conference. She said that with lawmakers prioritizing housing and addiction services in the five-week session it was inevitable that some controversial bills wouldn’t pass.  

“I’ll be honest,” she said. “It’s challenging to feel disappointed about a session when we set our clear priorities out and achieved all of those priorities.” 

Despite the bill’s failure, Kitzhaber said that it generated more awareness about the issue of private equity and other large corporations’ growing presence in health care. The controversy over giant UnitedHealth Group’s plan to purchase The Corvallis Clinic is also bringing the issue into view for Oregonians, he said.

He said he expects opponents of the bill to prepare for the issue to return in 2025. 

“This issue has become very visible,” he said.

You can reach Jake Thomas at [email protected] or via @jakethomas2009.


Submitted by Laura KELLENBARGER on Tue, 03/12/2024 - 16:24 Permalink

Disappointing the HB 4130 unable to pass this session.  I worked in healthcare field for 33 years.  Retired and healthcare covered by Medicare plus a supplement since 2020. Relocated back to Eugene assuming adequate healthcare system. Finding a provider has become more difficult.  Some will not take Medicare patients. Oregon Medical Group allows some. Recently purchased by OPTUM 2022? and the access has deteriorated w/long wait times. Needed a med refill and found out on social media (Nextdoor App) my PCP had left OMG. Inquired who could refill/provide patient care going forward and online letter from OMG executive office response from a Medical Asst. received stating there would be no transfer within OMG to a new provider. 60 days medication refill offered and find your own new provider. A list with small local primary care practices provided. Some indicate they do not take Medicare. Need to phone them to request whether they are taking patients. Letter suggests OMG "may" be open at a later date to taking new primary care patients, but no guarantee. What a fine way for OPTUM to "reorganize" and simultaneously create an opportunity to cull out patients within the OMG system who may need more care or limited insurance reimbursement like Medicare or Medicaid. Providers/staff have left OMG as I understand it d/t United Healthcare OPTUM management's creating poor working conditions. So the problem will be resolved by abandoning/dumping patients? Without notice? Having to scramble to find someone to prescribe necessary medication? Let alone a practice/physician with an opening which takes Medicare. Since when it this solution appropriate?  I believe it's a result of the corporatization of healthcare into a profit driven business model which exploits everyone involved to chase their bottom line. Private equity having already looped in some of the physicians, there will likely be concern and resistance from them to regulate this activity/behavior. Appears United Healthcare has their eye on The Corvallis Clinic next. This is bad news for all of us. Except for the top executives/insurance industry/for profit healthcare. I can't believe after being employed in these systems ( I still pay on graduate school loans) all these years and now I am chasing down a physician to provide my healthcare? And worried about when the next shoe will drop? 

The issues in this bill definitely needs to be readdressed asap.