Oregon lawmakers are considering a bill that would restrict private equity and corporations from controlling Oregon healthcare companies.
The idea behind Senate Bill 951 was first introduced last year by Rep. Ben Bowman, a Tigard Democrat. But the proposal didn’t make it through the short session. This version, which has more support, would ban most non-compete and non-disparagement agreements and would severely restrict corporate and private equity ownership in many healthcare businesses.
Opponents fear the bill could discourage outside healthcare investment in Oregon, and make it more difficult for smaller clinics to afford expensive equipment or assistance with billing.
In its first hearing this week in the Oregon Senate’s Committee on Health Care, Rep. Lisa Fragala, D-Eugene, and Rep. Sarah Finger McDonald, D-Corvallis, strongly advocated for the bill.
Both women are cancer survivors, with Finger McDonald facing a third battle with colon cancer this legislative session, and said corporate buyouts and cutbacks have impacted their ability to access care.
Fragala said a proposal like this may have prevented an out of state corporation, Optum, from buying Eugene-based Oregon Medical Group. After it was purchased, dozens of physicians left, leaving thousands without primary care.
Fragala said she was one of the patients who lost her primary care provider, which happened around the same time she found out she had breast cancer.
“Cities like Eugene and Corvallis are canaries in the coal mine,” Fragala told the committee. “Don't ignore the warning signs.”
The same company that purchased Oregon Medical Group bought the Corvallis Clinic last year.
Finger McDonald said there have already been cutbacks in the number of providers and services at the Corvallis Clinic, which has impacted the healthcare capacity for the entire region. She said she and many other patients have had to wait longer for lab work - like blood tests.
She said Corvallis also now has fewer specialized providers.
“Patients are traveling to Portland for care and primary care providers are managing care for conditions that are usually managed by specialists,” Finger McDonald said.
Nearly 20 lawmakers have signed onto the bill, including a pair of Democratic lawmakers from Eugene: Sen. James Manning and Rep. Nancy Nathanson. The list of sponsors includes both Democrats and Republicans.
Opponents include Scio Republican Rep. Ed Diehl, and some healthcare companies. They argued the proposal might end up reducing healthcare access by making it less attractive to invest in Oregon healthcare companies.
“This bill restricts access, discourages innovation and investment, and forces successful healthcare providers out of business,” Diehl said in a news release.
The bill would still allow corporations and private equity groups to make investments in Oregon private practices, but would not allow them total control over those practices or the decisions physicians make.
Some providers, including Dr. Ed Boyle, the founder of a practice with clinics in Bend and Portland, argued the bill only targets one side Oregon’s healthcare cost and access problem.
He said limiting private equity investment means many small providers might turn to hospitals when they have financial problems, or struggle to handle the burden of billing and legal requirements.
“When I see a patient as an independent practitioner I have a certain billing rate,” Boyle told lawmakers. “If I go work for the hospital, in the same clothes, same office, same staff, I can charge four times as much and the people who pay that are the patients.”
Several other doctors testified in support of the bill, including Dr. John Moorhead, who spoke on behalf of the Oregon chapter of the College of Emergency Physicians.
He argued that corporate or private equity practices - hiring young physicians with significant medical school debt on the condition that they sign non-compete and non-disparagement clauses, may have far-reaching consequences if allowed to continue.
“These clauses and these activities are a major determinant of whether these young physicians stay in the state of Oregon or not,” Moorhead testified.
The bill is scheduled for a possible vote in the Senate Committee on Health Care on Tuesday, March 11.
