The struggle for control over our health care system has reached a critical turning point in Oregon, with the influx of private equity firms and other investor-driven entities into the market.
Though Oregon has long had a doctrine protecting the patient-doctor relationship, private capital’s intervention in medical decisions now compromises this doctrine.
But this session, lawmakers will again consider legislation that aims to restore a balance and safeguard the core values of Oregon’s health care system, prioritizing patient care over corporate greed.
The legislation, Senate Bill 951, stems from a trend that has occurred over the past decade. Private equity has initiated a wave of acquisitions, transforming hospitals, clinics, and nursing homes into profit-driven entities. While private equity firms promise innovation and efficiency, the reality is much bleaker.
Leveraged buyouts burden health care facilities with overwhelming debt, and the consolidation of smaller practices into impersonal conglomerates managed by out-of-state interests diminishes patient care. These strategies are designed to extract profits rather than enhance care. Patients face escalating costs without corresponding improvements in quality, and studies have associated private equity-backed facilities with poorer outcomes, including higher mortality rates.
Oregon has experienced these effects firsthand. Once a state renowned for its independent providers and community-focused care, it now struggles with the growing influence of private equity. Management service organizations, which provide business services to medical practices, have become the tools of outside corporations to bypass state laws that prohibit corporate control of medical practices. Under the guise of administrative support, MSOs exert control over staffing, billing, and treatment protocols. The outcome is a healthcare system where MBAs, not physicians, make the decisions, and patient care becomes secondary.
The consequences are glaring across Oregon. In cities like Portland and Eugene, long-standing relationships have deteriorated as private equity-backed entities prioritize high-margin services and decrease time spent with patients to maximize profits. Rural areas face even steeper challenges. Consolidation forces patients to travel long distances for care, disproportionately impacting low-income and underserved populations. This transformation is not merely inconvenient; it endangers the foundational promise of health care to deliver timely, accessible, and compassionate care to all who seek it.
The situation for health care workers is equally alarming. Physicians find their clinical decisions overridden by corporate directives focused on profits. Nurses and support staff are pushed to their limits, working in environments plagued by understaffing and relentless cost-cutting. Burnout and turnover rates soar, further destabilizing a system already under significant strain.
Transparency is among the most critical issues at stake. Many patients remain unaware that private equity firms control their health care providers, making decisions about pricing, staffing, and care behind closed doors. This lack of transparency undermines trust—a fundamental aspect of effective healthcare delivery—and leaves communities in the dark about the forces shaping their care.
One legislative proposal directly addresses these urgent issues. It redefines the control between professional medical entities and management service organizations, ensuring licensed medical providers maintain authority over clinical decisions. It also closes loopholes that permit dual compensation models, where physicians are beholden to these service organizations, ultimately undermining their independence.
The legislation also significantly restricts noncompete and nondisclosure agreements, which inhibit transparency and accountability. Violations of these provisions would be regarded as unlawful trade practices, and strong enforcement measures would be enacted to hold violators accountable.
This legislation is not just about a regulatory adjustment: it amounts to a moral stance against the commodification of health care. The bill affirms that health care is meant for patients, not investors. It would ensure that Oregon’s health care system remains grounded in care, trust, and community values, safeguard providers’ independence while protecting patients from predatory practices, and enhance the integrity of our health care system.
Oregonians now face a choice: We can allow private equity to continue dismantling the values that make our healthcare system unique or demand transparency, accountability and policies prioritizing people over profits.
Enacting legislation to strengthen the prohibition against corporate interference in medicine would reaffirm our commitment to a health care system that serves everyone — not just investors — and preserve the trust and care that characterize Oregon’s approach to medicine.
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