Groups of emergency physicians and consumer advocates in multiple states are calling for stricter enforcement of decades-old laws banning the ownership of medical practices by companies not owned by licensed physicians.
Thirty-three states and the District of Columbia have rules banning so-called corporate medical practices. But critics say that over the years, companies have bought or set up local talent groups nominally owned by doctors, limiting their powers so they can’t control them directly. have successfully circumvented the ban on possession of medical practice.
Appearing nearly 100 years ago, these laws and regulations oppose the commercialization of pharmaceuticals, preserve the independence and authority of physicians, and place the physician-patient relationship above the interests of investors and shareholders. was intended.
Those campaigning for stricter enforcement of the law say physician staffing firms owned by private equity investors are among the most egregious offenders. A private equity-backed staffing firm manages a quarter of her emergency rooms across the country, according to a Raleigh, N.C.-based doctor who runs an ER doctor recruitment site.Two of the largest are based in Nashville, Tennessee imagine health careis owned by investment giant KKR & Co., and Knoxville, Tennessee-based TeamHealth is owned by Blackstone.
Court filings in multiple states, including California, Missouri, Texas and Tennessee team health It allegedly used the group of doctors as a strawman to circumvent corporate practice laws. However, these filings typically relate to financial cases including wrongful termination, breach of contract, and overbilling.
Physicians and consumer advocates across the country are now anticipating a California lawsuit against Envision, which is set to begin in federal court in January 2024. The plaintiffs in the lawsuit, the Milwaukee-based American Academy of Emergency Medicine Physicians Group, allege that Envision has used a shell business structure to retain de facto ownership of the ER Staff Group, and have sued the court for their to be declared illegal.
“We are not asking them to pay any money, nor will we accept being paid to drop the case,” said David Milstein, the plaintiff’s lead attorney. , we are simply asking the courts to ban this model of practice.”
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“Possibility to spread nationwide”
A group of doctors believe the victory will lead to a California-wide ban on the practice. This is done not only for the ER, but also for other staff provided by Envision and Team Health, such as anesthesiology and hospital care. The California Medical Association has upheld the lawsuit, saying it “defines the boundaries of California’s prohibition against corporate medical practice.”
Plaintiffs, along with many doctors, nurses, consumer advocates, and some members of Congress, believe the success of the lawsuit will cause regulators and prosecutors in other states to take corporate drug bans more seriously. North Carolina Senator Julie Mayfield said, “A decision anywhere in the country that corporate ownership of medical practices is illegal could have national repercussions and should never be taken seriously. I hope that is the case.
But many are skeptical of the move to reinvigorate laws restricting corporate practices in health care, believing it is ushering in a golden age of health care. The genie has come out of the bottle, they say, noting that the profit motive has permeated every corner of healthcare and that nearly 70% of US doctors are now employed by companies and hospitals. say.
Barack Richman, a law professor at Duke University, says the medical doctrine corporate practice “has a very interesting history and isn’t very flattering.” “Healthcare professionals were trying to assert their professional superiority in ways that were less beneficial to patients and the market, and which provided many benefits for themselves.”
The California lawsuit involves Placentia-Linda Hospital in Orange County, where the plaintiff’s physician group lost its ER management contract with Envision. The complaint alleges that Envision uses the same business model at numerous hospitals across the state.
“Envision exercises deep and pervasive direct and indirect control and/or influence over medical practice, makes decisions that directly and indirectly affect medical practice, and treats physicians as mere treating them as employees and diminishing their independence and freedom from commercial interests.” to complaints.
Envision said it complies with state law and its operating structure is typical in the healthcare industry. “Legal challenges to the structure have proven futile,” Envision wrote in an email. “Care decisions have and will always be made between clinicians and patients,” he added.
TeamHealth, an indirect target of the incident, claims that its “world-class operational team” provides administrative services and that “clinicians are commonly used by hospitals, health care systems, and other health care providers. Through structure, we will be able to focus on the practice of medicine and patient care.” Country.
State rules vary widely
State laws and regulations governing corporate medical practice determine whether there are exceptions for nonprofit organizations, how much of a doctor’s earnings outside of the management company can be retained, who can own the equipment, and how violations are punished. It depends a lot on several factors, including whether the New York, Texas, and California are believed to have the most restrictive restrictions, while Florida and 16 other states have none.
Kirk Ogroski, a partner at law firm Goodwin Proctor, said this type of control structure predates the emergence of private equity in the industry. “I would be surprised if a company interested in investing in this space messed up its founding documents. It would shock me,” Ogroski said.
Private equity-backed companies have been drawn to emergency rooms in recent years because ERs are profitable and can charge large sums for out-of-network treatment. At least until federal law cracks down on sudden charges. Envision and TeamHealth are prioritizing profits by maximizing revenue, cutting costs and consolidating smaller clinics into larger groups, critics say.
Envision and TeamHealth are privately held companies, so it’s difficult to find reliable data on their financial health and market penetration.
Dr. Leon Adelman, co-founder and CEO of Ivy Clinicians, a startup recruiting site for emergency physicians based in Raleigh, spent 18 months piecing together data to find a private equity-backed staffing firm. was found to operate 25% of the emergency rooms in the United States. TeamHealth and Envision have his two largest shares at 8.6% and 8.3% respectively, Adelman said.
Other estimates put the penetration of ER by private equity at nearly 40%.
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doctors press for investigation
Efforts by emergency doctors and others to challenge alleged violations of private equity and staffing firms have so far had frustrating results.
An advocacy group called Take Medicine Back, formed last year by a small group of ER doctors, wrote to North Carolina Attorney General Josh Stein in July asking him to investigate violations of the company’s ban on medical practice. Also, because Stein holds a senior position with the National Association of Attorneys General, the letter states that he persuaded his fellow AG to investigate “broad lack of enforcement of medical law corporate practices in multiple states.” It also seeks to persuade them to start .
The group’s leader, Mitchell Li, M.D., said he was initially disappointed with the response he received from Stein’s office. I have.
Dr. Robert McNamara, co-founder of Lee’s group and director of emergency medicine at Temple University’s Louis Katz School of Medicine, along with Houston physician Dr. David Hoyer, submitted a draft complaint to the Texas Medical Commission. and asked the Commission to intervene in two cases. Physicians accused of predecessors to professional organizations controlled by Envision and TeamHealth. In both cases, the board has refused to intervene.
McNamara, chief medical officer for a group of doctors in the California Envision lawsuit, filed a complaint with Pennsylvania Attorney General Josh Shapiro that a group called Pennsylvania PC’s Emergency Medical Services has signed a contract with ER. claimed to have attempted Crozer Keystone Health System doctors were wholly owned by TeamHealth and acted as a shell to avoid scrutiny.
A senior official in Shapiro’s office said the complaint had been referred to two state agencies, but McNamara said he had heard nothing in over three years.
Disagreements on the Role of Private Equity
Proponents of private equity ownership say it has brought many benefits to healthcare. Jamal Hagler, vice president of research at the American Investment Council, said private equity brings expertise to the hospital system, adding: or the development of new technologies.”
But many physicians who have worked for private equity firms say their mission is incompatible with medical best practices. They say they are focusing more on speed and patient numbers than on safety. Prefer untrained and inexpensive healthcare providers. Inappropriate treatment protocol for a particular patient.
Dr. Sean Jones, an emergency physician in Asheville, North Carolina, said his first full-time job was at a Florida hospital where Emcare, a subsidiary of Envision, operated emergency rooms. According to Jones, EmCare worked with hospital owners to push physicians to meet performance goals related to wait times and treatments that aren’t always good for patients.
For example, if a patient showed up with an abnormally high heart rate and breathing rate (a sign of sepsis), doctors would have expected to administer large amounts of fluids and antibiotics within an hour, Jones said. However, these symptoms can also be caused by panic attacks or heart failure.
“I don’t want to give a heart failure patient two or three liters of fluids. I get emails saying, ‘You’re not doing this,'” he said. “No, no, I didn’t. They couldn’t breathe because they had too much water in their lungs.”
Envision says its 25,000 clinicians “like all clinicians are high quality, compassionate and use independent judgment to deliver clinically appropriate care.”
Jones felt otherwise. “He doesn’t need an MBA to tell you what to do,” he said.
Kaiser Health News is a national health policy news service. This is an editorially independent program of the Henry J. Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.
