Take Medicine Back from Corporate Practice

In order to save American medicine, control healthcare costs, and protect the public, it is time to resurrect the ban on corporate interference in the physician-patient relationship. Prohibitions on the corporate practice of medicine (CPOM) emerged during the Gilded Age when physicians raised an alarm to the dangers posed to their profession and patients by powerful corporations of the time. The antitrust movement recognized similar threats to the public and took on monopoly power during the great trust busting era.

More than a century later, following an era of lax antitrust enforcement, prohibitions on CPOM have been eroded and are broadly unenforced. More physicians (74 percent) are now employees of corporations—hospitals, insurance companies, private equity firms, and retail—than in history. Recognition of our entrance into a second Gilded Age has ushered in a new movement in antitrust enforcement. Just as antitrust enforcement has experienced a rise, fall, and rebirth, so too must there be a rebirth of prohibitions on the corporate practice of medicine.

While the situation medicine is facing is similar to that of the Gilded Age, greater obstacles face us today. Federal Trade Commission actions against the AMA in the 1970s prohibited it from imposing ethical restrictions on its members, including “prohibiting contractual relationships between physicians and non-physician corporations,” removing an important safeguard from corporatization of the profession. Corporate interests have embedded themselves into the fabric of legacy organized medicine – professional societies, the AMA – and even state boards of medicine.

A minority of physicians now aid and abet the corporate practice of medicine with impunity Standards of medical training established over a century ago developed to protect the public are continuously undermined by corporations. In an effort to maximize profits, corporations increasingly replace physicians with non-physician practitioners (NPPs) who have completed significantly less training, eliminating remaining safeguards to patients from the corporate practice of medicine.

Urgent and bold action is needed to protect the public. The profession of medicine must unite in (or unite in support of) a new era of professional ethics. Existing state prohibitions on CPOM must be robustly enforced and legislation must be strengthened. Historical federal actions against the profession of medicine must be re-examined to address unintended consequences. Payment systems that drive consolidation and vertical integration must be scrutinized. National legislation prohibiting the corporate practice of medicine must be enacted. Due-process rights and protections for any exceptions to the corporate practice of medicine for employed physicians must be fortified.