Good News Everyone!

Oregon has just passed a bill that bans corporate control of doctors' practices.

It turns out that UnitedHealth Groups's attempts to use the failure of its own payment system to take over now cash strapped medical practices did not go over well in the Beaver State.

When further juxtaposed with other UHC actions, which consisted of f%$#ing with the healthcare of 2 Oregon state reps, led to this bill passing:

Two days ago, [June 9, I just found the story] Oregon Governor Tina Kotek signed the nation’s strictest law against corporate control of health care practices in the state. It’s a major defeat for private equity and large health insurers, and something that advocates and physicians have been advocating for years, as more and more of the state’s capacity got bought up by financiers. It’s also a ground-breaking event that could catalyze the creation of a new health care system, one managed by medical professionals and patients instead of Wall Street. And it’s all thanks to UnitedHealth Group. 

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The logic of the bill is clear. As Oregon nurses noted in lobbying for the bill, corporate control of medicine is fundamentally antagonistic to quality care, as it removes decision-making from medical professionals and patients and puts it in the hands of financiers. For instance, private equity owned clinics charge 20% more for the same procedures. Such ownership arrangements increase costs, make patient outcomes worse, and foster physician burnout, and of course, there are no improvements to quality or access.

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And we can actually thank UnitedHealth Group, which provided Oregon with a particularly noxious experience in health care, and the political culture to do something about it. Because UHG’s tactics are so brazen and extensive the company actually screwed over two separate Oregon state representatives, both of whom have cancer, and both of whom in turn testified on behalf of the bill. To understand how UHG messed up so badly politically, it helps to look at the actual process of how the bill got passed.

In March of 2024, Optum, the largest for-profit medical provider in America and a unit of UnitedHealth Group, applied for emergency approval to take over a large primary and specialty physician practice in Oregon, the 600 person Corvallis Clinic in Western Oregon. If the Oregon Health Authority didn’t approve the acquisition immediately, the clinic claimed, it wouldn’t be able to cover rent, payroll or other expenses. Only UHG’s cash infusion could keep the doors open. And this claim was likely true, Corvallis was in desperate financial condition.

What caused Corvallis’ cash crunch? Well, its application to Oregon regulators was redacted, but the American Prospect reported what insiders all knew - a different UHG subsidiary, the Change Health payment network, had been hacked and was nonfunctional, which meant that hospitals, pharmacies, and clinics nationwide couldn’t get paid for their services. And that included Corvallis Clinic, which couldn’t get access to money it was supposed to be paid by, among others, UnitedHealth Group. In other words, UHG caused a cash flow crisis at Corvallis, and then swooped in to buy it on the cheap.

Two months ago, Oregon state representative Sarah Finger McDonald gave testimony to the state legislature on what happened next. It’s an ugly story.

The most obvious impact was on the working conditions in the Corvallis clinic; doctors had to see too many patients, and began burning out. Nine primary care doctors left. Now the clinic isn’t accepting new patients. All of the neurologists departed as well, leaving entire counties without any of those specialists. Three of five gastroenterologists departed, and the two remaining ones no longer do on-call work. Medicaid insured patients can’t really use the clinic anymore, and Optum closed the lab for six months. These experiences affected not just Corvallis patients, but the entire region. They put pressure on other physician practices to accept an extra caseload, especially of poorer patients. Similarly, the other labs in the area are overloaded, and patients have to wait hours for a simple blood draw. McDonald herself has cancer, and she explained how she has “spent a lot of time” sitting around at the remaining regional lab.

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This new law is fairly simple; Oregon is simply closing up the loopholes that allow corporations to sidestep its CPOM rules. The law doesn’t block investment by corporations in medical practices, but it prohibits control of clinical practices by anyone but licensed medical providers. Now, a clinician, not a banker, must have decision-making authority over staffing levels, wait times, clinical decisions and operations, and as well diagnostic coding decisions, billing and collection policies, price setting, and payer contract negotiations. 

The law also bans non-competes and gag clauses that lock in doctors and nurses, which was a major incentive for corporations to acquire practices and then worsen working conditions. It’s not ironclad; there are carve-outs for behavioral health, telehealth, and hospitals, and hospitals can still acquire clinical practices. iI’s also not immediate; It kicks into effect in three years, leaving substantial time to adjust, and it has a private right of action for enforcement, so aggrieved employees or competitors can litigate against lawbreakers. If you want the specifics, here’s the legislative analysis from the state Senate, and here’s a FAQ from Oregon Senator Deb Patterson, the main proponent of the bill.

The theory behind the corporatization of medical practices was that business guys could rein in excessive costs from those pesky medical professional.

This was never going to happen.  The finance guys can't fix things, they can only loot and defraud.