Healthcare Costs Quadrupled Since Corporate Practice of Medicine Laws Were Weakened

The majority of states (34) enacted prohibitions on the Corporate Practice of Medicine (CPoM) after the Doctrine was established at the turn of the 20th Century. The doctrine and the corresponding prohibitions were established in order to protect the sanctity of the physician-patient relationship from lay-corporations influencing the practice of medicine for profit.

However, CPoM doctrine was weakened in the 1970's by Federal actions intended to control healthcare costs by demoting the profession of medicine from "learned profession" to that of a commodity, and paving the way for corporations to dominate the the medical profession and healthcare system. Today, 74% of physicians are employees of corporations, and healthcare costs have skyrocketed. Existing CPoM laws go broadly un-enforced by state Attorneys Generals despite increasing calls to do so.

FTC Commissioner Bedoya: States Should Enforce Existing Corporate Practice of Medicine Laws

The majority of U.S. states have the ability to take action now, and enforce existing prohibitions. Experts at Take Medicine Back are available to provide insight on the mechanisms by which corporations have skirted state laws - generally with the help of a physician "paper owner" who is aiding and abetting the corporate practice of medicine.

"First, I think those state laws about medical providers needing to be in charge of health practices are tremendously important... there's a lot of evidence out there that... certainly the spirit of those laws ... is not being adhered to... There's a reason states passed those laws; it's because doctors take hippocratic oaths, it's because doctors are experts .. it's because doctors form relationships with their patients. It's a respected profession not just because people do well - it's because they're literally taking care of people and they care. And so I think that any state official with these laws on their books would do well to make sure they're being enforced, both in terms of letter and spirit.."

- Federal Trade Commissioner Alvaro Bedoya, The Capitol Forum Conference on Healthcare Competition, Washington DC, November, 2023

Take Medicine Back, Michigan State Medical Society Call for Enforcement of Existing CPoM Prohibitions

In July, 2022, Take Medicine Back wrote a coalition letter to North Carolina Attorney General Josh Stein, then president-elect of the National Association of Attorneys General, requesting an investigation into the lack of enforcement of existing prohibitions on the Corporate Practice of Medicine in North Carrolina, and to lead a multi-state investigation as president. Subsequently Michigan State Medical Society became the first state medical society in modern history to do the same in Michigan. This effort was led by Chief Executive Officer of the Michigan State Medical Society (MSMS), Tom George, MD, and Take Medicine Back advisory board member Leah Davis, DO, establishing MSMS as a national leader in reclaiming the profession of medicine from corporate interests.

CPoM Legislation for a New Gilded Age

The world has changed quite a bit over the course of a century. Even if enforced, existing state prohibitions on the Corporate Practice of Medicine are patchwork, and ill-equipped to deal with the modern intrusion of lay-corporations in the physician-patient relationship, that put profits over patients. New statutes are needed, re-interpreting the ethical basis of the CPoM doctrine in a modern era that takes into account a payment system that drives corporatization and consolidation (including state Medicaid programs), and the corporatization and consolidation of hospital systems.

Modern Legislation Strengthening CPoM Doctrine Should:

Close legal loopholes - that allow corporations to skirt existing prohibitions on CPoM through the use of sham-ownership associations, exerting defacto control over physicians through the use of a "paper owner" or "captive physician."
Ban private equity ownership of physician practices without exception. The private equity business model is antithetical to the practice of medicine, and is considered "fundementally incompatible" with a stable healthcare system that serves the needs of patients according to the American Antitrust Institute.
Strengthen physicians' due process rights at hospitals - physicians are routinely retaliated against and threatened when speaking out for patient safety.
Ban non-compete clauses for physicians and all healthcare workers. Non-compete clauses increase labor power of hospitals and corporations over physicians, forcing them to accept often dangerous and unethical working conditions or to move away from their communities.
Reform the payment system to support independent physician practices. Complex payment systems, including so-called "Value Based Care," have fueled corporatization and consolidation, putting independent physician practices at a competitive disadvantage.
Address the growing threat of tech companies practicing medicine without a license across state lines

The Corporate Practice of Medicine in the Courts

The corporate practice of medicine (CPoM) is currently being litigaged by the American Academy of Emergency Medicine - Physician Group (AAEM-PG) against Envision, alleging the illegal corporate practice of medicine in California. AAEM-PG is seeking a judgment, not financial damages, in order set precedent.

Crisis in Massachusetts: Steward Health and The Corporate Practice of Medicine

The crisis of Steward Health System, owned by a private equity firm, has made national news, demonstrating all-too-vividly for MA residents how private equity can pillage a health system and leave the community, physicians, and healthcare workers behind. Thankfully, no sitting elected official has a deeper understanding of the Corporate Practice of Medicine Doctrine than MA Senator Elizabeth Warren. Sens Warren and Markey recently held a hearing, with Sen Markey introducing the Health over Wealth act. Both voiced opposition to the plan of Steward Hospital to sell the physician group to United Health/Optum. Massachusetts is at a crossroads - one that could lead the nation with regard to restoring the physician-patient relationship and reigning in corporate greed.

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