In Oregon, a lawmaker wanted to understand this contradiction: His state had a corporate practice of medicine doctrine in place for nearly 80 years that said physicians must run and control medical clinics, yet the state was seeing an overwhelming trend of corporate consolidation and private equity firms buying clinics.
Ultimately, Oregon lawmakers last year passed a bill to block corporate takeovers of medical practices, a first of its kind in the nation. Physicians have an ethical duty to patients and to public health, while private equity firms and corporations have a fiduciary duty to maximize profit for their shareholders.
“What we tried to do in Oregon … is to be clear that the corporate practice of medicine doctrine means something more and we expect physicians to be in charge. It doesn’t mean you can’t partner with private equity firms or corporations, but it means at the end of the day when decisions are being made that impact patients, they have to be made by the physicians,” said Ben Bowman, the majority leader of the Oregon House of Representatives.
Bowman spoke about Oregon’s law at the 2026 AMA State Advocacy Summit, held in California. Maureen Hensley-Quinn, the senior program director for the National Academy for State Health Policy, joined the Oregon lawmaker for a panel discussion, “The New Corporate Practice of Medicine Doctrine.”
Barak Richman, PhD, the Alexander Hamilton Professor of Business Law & Policy Program at George Washington University Law School, moderated the discussion. The expert panelists examined how states are looking to close loopholes and regulate entities that aren’t part of common law or outdated legislation.
Oregon’s approach
The Oregon Medical Association (OMA) provided testimony in support of the legislation. OMA has said that the law attempts to balance physicians’ interests to take care of patients and corporate interests aiming to make investments and bring efficiency to health care while turning a profit.
The association notes that the bill:
- Sets legal standards for how management services organizations may assist with managing a medical practice.
- Redefines the list of business entities that are allowed to engage in the practice of medicine.
- Addresses the widespread use of noncompete and other restrictive agreements imposed on physicians and health care professionals.
The OMA has a summary of the new law on its website and notes that the “legislation is complex and will require monitoring as it is implemented in the coming years to ensure that the goals of the bills are being met.”
At the AMA State Advocacy Summit, Bowman said that as health care infrastructure rapidly changes, he sees the corporate practice of medicine bill as a way to prevent care from deteriorating.
“Let’s prevent further corporatization, further consolidation in the health care market. I’m absolutely open to other approaches with a more targeted lens, but at the very least we cannot allow all our clinics to be owned by Amazon, CVS, Walmart and private equity firms you’ve never heard of,” he said.
Nationwide concerns
What is being seen in Oregon is a trend being echoed across the country. One study found that private equity acquisitions in health care increased sixfold over a decade, with 484 deals in 2021, up from 75 in 2012. Corporations affiliated with major health insurers are acquiring physician practices at high rates too.
Meanwhile, research suggests that private equity ownership is associated with mixed to harmful impacts on the quality of care, increased health care costs, and in some cases can result in worse health outcomes in certain health care settings.
Hensley-Quinn told the physicians and medical society executives gathered at the AMA State Advocacy Summit that her organization heard from members across the country that they wanted to revise a model piece of legislation that they helped create so that it included, among other things, language that would allow states to have some oversight of major transactions that are happening with health entities.
She said the model legislation is a comprehensive approach to consolidation. The model legislation, among other things, includes a “quite long” list of prohibitions that help protect physicians in keeping control over their practices. For example, it addresses concerns about physicians entering into agreements to help with marketing, human resources and the like and discovering they signed over key pieces of ownership, such as hiring and firing decisions, without realizing it.
Hensley-Quinn noted that California passed legislation last year and that they are watching legislation in Massachusetts, New Mexico, Texas, Indiana and Vermont.
“It spans the nation. It’s small, it’s big, it’s states with huge consolidation, it’s states with a lot of independence, but Oregon really has led so far,” she said. “We get a lot of requests for technical assistance on this issue and what that means is helping people understand what this is. So, I anticipate that moving forward, there will be other states in the next legislative session where we see this coming up.”
Turn to the AMA for help
The AMA Advocacy Resource Center has created a resource that breaks down five policy mechanisms that states are using to try to limit undue corporate influence when these entities invest in physician practices.
With “Legislative Approaches to Curb Corporate Influence in Health Care” (PDF), the AMA’s experts outlined the rationale behind each of the five approaches and provides examples to highlight areas where legislative requirements tend to diverge. It also includes an appendix that lays out some specific laws that states have proposed or passed.
The AMA has policy on the impact of private equity on medical training that, among other things, says that an institution or medical education training program academic mission should not be compromised by a clinical training site’s fiduciary responsibility to an external corporate or for-profit entity and that the AMA will encourage graduate medical education training institutions, programs and relevant stakeholders to demonstrate transparency on mergers and closures, especially as it relates to private equity acquisition.
Also, the AMA has created resources with advice for physicians (PDF) on venture capital and private equity investment.
