CHICAGO — Responding to the rise in corporate investment in the health care sector, physicians and medical students at the Annual Meeting of the American Medical Association (AMA) voted to strengthen guidance for physicians considering a relationship with a corporate entity.
When a physician elects to enter a corporate relationship, that choice should consider important safeguards recommended by the new additions to AMA guidance that explicitly identify the clinical and operational decisions that should remain in the ultimate control of the physician.
“The AMA supports a physician’s right to choose their mode of practice and urges physicians to carefully consider the risks and benefits associated with corporate relationships,” said AMA Board Member Marilyn J. Heine, M.D. “If a physician elects to enter into a corporate relationship, that choice should be made with important safeguards to ensure clinical autonomy and authority over patient care are retained by the physician.”
Corporate investment can offer an alternative to selling a practice to a hospital or health system, and physician-owners can possibly benefit from being freed of business, financial, and operational administrative responsibilities, leaving more time for a focus on patient care. The risks to physicians include a loss of independent authority over clinical and operational matters. Decisions made by corporate investors on matters often characterized as operational or administrative may in some cases intrude on clinical decision-making and physician autonomy, as well as affect quality of care and patient outcomes.
According to newly strengthened AMA guidance on corporate relationships, the clinical and business decisions that should remain in the ultimate control of the physician include but are not limited to:
- Determining which diagnostic tests are appropriate;
- Determining the need for referral or consultation with another clinician;
- Being responsible for the ultimate overall care of the patient, including treatment options available to the patient;
- Determining how many patients a physician shall see in a given period of time or how many hours a physician should work;
- Determining the content of patient medical records;
- Selecting, hiring, or firing physicians and other medical staff based on clinical competency or proficiency;
- Setting the parameters under which a physician or medical practice shall enter into contractual relationships with third-party entities;
- Making decisions regarding coding and billing procedures for patient care services; and
- Approving the selection of medical equipment and medical supplies.
Also added to the AMA guidance is a provision calling for agreements between physicians and corporate entities to include clear protection and dispute resolution processes for physicians advocating on patient care and quality issues.
“Many physicians are rightfully concerned about the loss of professional control that could arise from partnering with a corporate entity,” said Dr. Heine. “At the same time, physicians may value corporate investment as an option to free private practices from the cumulative impact of burdensome regulations, rising financial strain, and relentless cuts in payment. The underlying challenges to physician practice viability and stability must be better addressed so independent physician practices can thrive without the need for corporate investment.”
Among independent physicians that sold their practices in the last 10 years to a corporate entity, the most cited reason was inadequate payment rates (PDF) according to a recently released AMA survey. Next were the need to improve access to costly resources and better manage payers’ regulatory and administrative requirements.
The AMA is fighting for physicians and is focused on immediate threats to the physician workforce and health care access, including fixing the broken Medicare payment system that punishes doctors, unburdening physicians from prior authorization and other administrative headaches, and making technology work for physicians. The AMA is working on all fronts to create a health care system that better supports physicians to provide the best possible care for patients.
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About the American Medical Association
The American Medical Association is the physicians’ powerful ally in patient care. As the only medical association that convenes 190+ state and specialty medical societies and other critical stakeholders, the AMA represents physicians with a unified voice to all key players in health care. The AMA leverages its strength by removing the obstacles that interfere with patient care, leading the charge to prevent chronic disease and confront public health crises and, driving the future of medicine to tackle the biggest challenges in health care.
