A legislative bill that aims to bar corporate interests from meddling in patient care in Oregon cleared the Legislature on Wednesday and is headed to Gov. Tina Kotek’s desk.
Senate Bill 951, among more than a handful of bills nationwide directed at the corporate influence on medicine, was approved by 41 House members, including seven Republicans. Sixteen Republicans voted against it.
The bill aims to ensure that licensed medical providers — and not corporations, private equity firms or shareholders — are in charge of patient health care and treatment plans. The bill would bar nonmedical entities or personnel from owning or controlling private medical clinics, including through hiring, setting work hours or determining compensation.
Only one lawmaker, Republican Rep. Ed Diehl of Stayton, spoke against the bill, saying he supports the idea but that it needs more work. Two other Republicans, Salem Rep. Kevin Mannix and Cyrus Javadi of Tillamook, voiced their support along with four Democrats, including the bill’s brainchild, House Majority Leader Ben Bowman of Tigard.
“Senate Bill 951 is about more than just a policy fix,” Bowman said. “It's about the future of health care in Oregon. This bill is a line in the sand, and we are saying loud and clear with its passage in Oregon, patients come before profits.”
Second time around
The bill marks Bowman’s second attempt after a similar bill almost passed last year but ended up stalled during the short session in the Senate. UnitedHealth Group, the largest health insurer and employer of physicians in the U.S., lobbied against the bill, as did Amazon, which owns One Medical primary care clinics. They said the proposal would limit choices and investment and increase costs.
Most states have long banned corporate control of medical practices. In Oregon, for example, licensed providers must own at least 51% of private clinics. But since the rise of managed care in the 1970s, many states have relaxed controls on corporate ownership, and today more than 50% of private practices are owned by hospitals or profit-seeking entities like insurance companies and private equity groups.
In Oregon, Optum, a subsidiary of UnitedHealth Group, owns the Corvallis Clinic, One Medical Group in Eugene and GreenField Health in Portland while Amazon owns One Medical, primary care clinics located in the Portland area and around the country. Other clinics are owned by Walgreen’s and private equity firms.
Researchers have found that when private equity takes over practices and hospitals that patients often lose out, with higher health care costs and increases in patient falls and infections.
That’s one key reason why Bowman proposed the bill.
“Oregon needs this bill because corporate and private equity actors are rapidly taking over medical clinics in Oregon and across the country and then doing things that negatively impact patient care, burn out doctors and raise the cost of health care for everybody,” Bowman told The Lund Report.
The bill targets management services organizations that private practices hire to handle office work, barring them in most cases from owning or managing private clinics or exercising proxy control over them. Many private practices rely on these organizations to handle IT support, compliance and other tasks, giving physicians, nurses and other practitioners more time to focus on care.
Javadi, who has a private dental practice in Tillamook, said on the House floor the bill won’t ban management service organizations, which he said play important roles in health care.
“They keep the lights on, they handle the HR, they deal with insurance code that no human should have to read,” Javadi said. “That's all fine. But when the folks that are handling the logistics start making medical decisions, deciding how many patients a doctor must see per hour, which treatments are worth offering, or whether your town still pencils out for a clinic, that's no longer support. That's control.”
Corporations also try to control providers by making them sign noncompete agreements, which prevent them from serving the same patients if they leave a practice. The bill would void most noncompete agreements to prevent patients from experiencing what happened last year after Optum purchased the Corvallis Clinic. Several dozen physicians left, leaving patients in the lurch. It also happened in Eugene after Optum took over Oregon Medical Group, said Democratic Rep. Lisa Fragala of Eugene.
“In the summer of 2023, I was diagnosed with breast cancer.” Fragala said. “Earlier that year, I'd received a letter from OMG saying my primary care provider no longer worked there. So when my mammogram showed several masses, I did not have a (primary care provider).”
Though the bill aims to close a loophole in Oregon law, it is not inclusive. It includes a long list of exemptions, including hospitals, which own many clinics. Bowman said he excluded them to preserve the status quo.
“There was an attorney general's decision back in the 1970s that excluded hospitals from Oregon's corporate practice of medicine doctrine,” Bowman said.
Hundreds voice support
The bill drew more than 300 written comments, with nearly 270 in favor. They included patients, providers and medical students as well as officials for the Oregon Medical Association, the Oregon Nurses Association, the Oregon College of Emergency Physicians and the Oregon Association of Naturopathic Physicians.
The Salem Clinic, a physician-owned practice, also voiced support, with CEO Ryan Farwell calling the bill “a measured response to growing concerns about corporate influence in medicine.”
“It addresses critical gaps in oversight and ensures that medical decision-making remains in the hands of those who are trained, licensed and bound by ethical standards to prioritize patient care,” Farwell said. “Oregon’s physicians must have the ability to practice evidence-based medicine and tailor treatments to the unique needs of their patients — free from external financial pressures.”
But dozens of clinics opposed the bill. Amazon, which has expanded into health care through One Medical, with primary care clinics in the Portland area and across the country, also fought it.
“The bill’s current restrictions would result in increased patient costs, reduced care options, additional administrative burden on providers and decreased patient care time — all of which run counter to what patients, providers and employers need right now,” said Ellie Booth, senior policy manager for One Medical.
Optum also has lobbied against the bill, with an official telling Bowman in his office that the experiment of having physicians lead health care over the last 50 or so years has been a failure, the implication being that corporations need to be in control.
“I was told by one (Optum) lobbyist that the purpose for them opposing this bill is that it wouldn’t become a national model that other states would follow,” Bowman said.
Curtailing corporate influence on health care decisions has become a growing concern across the country, with six other states considering bills this year, according to researchers at Brown University in Providence, Rhode Island.
Near miss
With the bill’s predecessor dying last year in the Senate, Bowman started the proposal this time in the Senate by collaborating with Sen. Deb Patterson of Salem, chair of the Senate’s Health Care Committee.
“It was basically a strategic decision because the Senate was the place where we ran into hangups last time,” Bowman said. “I did not want to get to the end of the session and have it stuck over there again.”
He said he worked with opponents to get the bill passed. Mannix, the Salem Republican, said he was originally a “yes,” then was a “no,” then decided to support the final version. But Diehl, from Stayton, remained a firm “no.”
He said the bill would limit the ability of providers to manage and expand their services and that patients would experience reduced access to care, especially in rural areas.
Bowman disagreed, as did Javadi, the Republican dentist. He said the expansion of corporate control in medicine threatens health care in Oregon but happens behind closed doors.
“These decisions are often made in a way that patients never see them,” Javadi said. “They feel it in shorter appointment times, in restricted care, in the doctor who seems rushed or burned out or just not quite present. This is the quiet erosion of something essential, and that's what this bill was designed to stop.”
