Power Shift in Healthcare: Docs, Deals & Disruption 💥

Corporate Grip Loses Ground: Oregon Bars 🚫 PE Control of Doctors

Oregon’s SB 951 bans non-clinician control of physician practices, closing loopholes that allowed private equity and corporate entities to dictate clinical decisions. This law mandates licensed providers hold decision-making authority over operations, billing, staffing, diagnostics, and contract negotiations, while phasing in non-compete and gag clause prohibitions over three years.

Key Points

• SB 951 prohibits corporate control of clinical practices. Only licensed providers may oversee staffing, billing, pricing, payer contracts, diagnostics, and clinical decisions, with enforcement beginning in three years.

• The law expands Oregon’s CPOM rules by banning non-compete and gag clauses, aiming to curb private equity and Optum-style control that undermines physician independence.

• Optum’s 2024 takeover of Corvallis Clinic, following a cash crisis caused by its parent company has led to doctor departures, cutbacks in services, and limited access for Medicaid patients.

• Despite carve-outs for hospitals, telehealth, and behavioral health, SB 951 includes private enforcement rights and reflects a growing national trend toward regulating PBMs, hospital mergers, and pricing practices.

Why It Matters

This law marks a strategic break from Wall Street-driven healthcare, reasserting clinician autonomy and potentially sowing the seeds for a more ethical, patient-centered system. Its passage could trigger similar action in other states facing growing concerns over corporate consolidation.

Takeaway

Healthcare organizations in other states should closely watch Oregon’s approach as a potential model for restoring clinical autonomy. The law signals a shift toward rebalancing power away from financiers and back to licensed providers, with implications for compliance structures, ownership models, and long-term care delivery strategy.