Can Doctors Regain Authority in Corporate Medicine?
Updated: Aug 12
Is corporate medicine leading to an over-priced, hollowed out healthcare system characterized by dissatisfied patients and fewer healthcare providers, fed up with poor working conditions?
We spoke with Dr. Mitch Li, an emergency physician and founder of Take Medicine Back, which advocates for taking back emergency medicine from corporate interests.
Here are some highlights:
Corporate ownership of a health care organization implies that profit is more important to it than patient care when making strategic and operating decisions.
The conflict between clinicians’ mission to deliver quality care and corporations’ profit motive is not as simple as good vs. evil, so understanding the nuances is important to determining how to resolve it.
Corporate medicine creates the risk of lower-quality care and a poor patient experience, resulting in less trust of the organization, healthcare system and clinicians.
Doctors and nurses increasingly worry about negative repercussions from their employer based on either the care decisions they make or their comments about the role of corporate interests in care.
There are existing ways to align the mission of healthcare practitioners and business interests the can be applied.
A Brief History of Corporate Medicine
Legislators saw the potential for the conflict between the medical profession and business interests. That’s why in the 1950s, 34 states created laws or doctrines that prohibit the corporate practice of medicine. These doctrines required doctors to be on the books of healthcare organizations as owners because corporations lack the professional training to care for patients.
Ownership of healthcare organizations snuck up on the industry, however. Retiring physicians sold their practices to businesses, not other doctors. New doctors went directly into employed practice.
To comply with the anti-corporate-medicine laws, healthcare organizations simply put a doctor’s name on the ownership line of their documents, but profit, not care, became the focus.
The industry evolved as you would expect. Doctors went where they could give care. Business people went where they could to make money.
The tension in healthcare is often characterized as a struggle between greedy capitalists on one side and clinicians just trying to do their jobs and patients who get lower-quality care, a worse experience, and foot the bill on the other.
A more objective view is that clinicians aim to provide the best care for patients based on their training, which may not optimize an organization’s profit margins.
But private and health care organizations have a fiduciary — a legal — responsibility to shareholders and investors to focus on profit. They can’t put patients first.
Further, clinicians need business expertise to run their practices because of the complexity of the insurance business. Corporate buyers also bring resources to physician practices like billing departments and new technologies.
Because they are driven to optimize profit, corporations seek to increase revenue by attracting new customers and raising prices and reduce costs by improving efficiency, which has meant reducing staff, including the number of clinicians.
Private equity ownership is especially problematic because these firms often use debt to finance acquisitions of medical practices. The company, not the private equity firm is responsible for paying the debt. That results in even more furious efforts to drive revenue and cut costs.
Corporate Medicine’s Negative Impact on Patients and Clinicians
Three primary risks arise from excessive profit-seeking.
First, trust between clinicians and patients erodes, which can cause people to avoid care.
Patients get a bill from the hospital or emergency or outpatient facility, but they also get one with the doctor’s name on it. The doctor has no idea what the amount is, but the patient sees the name, and can be reluctant to see the doctor again or put off treatment because it is expensive.
The doctor becomes associated with the money, not the care.
Further the staffing reductions can create the perception that doctors and nurses don’t care for patients because they simply don’t have time to spend with the them.
Second, care quality can decline as clinicians spend less time to learn patients’ medical history to potentially identify root causes of symptoms and conditions, which could lead to better modes of care.
Third, while the term “burnout” conjures images of being overworked, a more appropriate term is “moral injury”.
Moral injury means that clinicians are asked to do things that are not in line with how they were taught to practice medicine, and for which they will be punished if they do not comply.
They are left worried about whether how they are treating a patient will cause a backlash by their employer if it has a negative financial impact on the organization. They become afraid to speak out if they think care is slipping or practices are not in the best interest of patients.
In some cases, there is only one health system in town, so doctors would have to move if they left the company. Further, they could be black-balled for standing up to corporate interests, making it difficult to get hired someplace else.
Imagine the clear and present danger of an emergency room doctor being afraid to do what she thinks is right for a patient.
Realign the Focus of Healthcare Organizations
Three main efforts could begin to balance and align the goals of healthcare business and clinician and patient interests.
First, healthcare organizations that practice corporate medicine could be transformed into Public Benefit Corporations like Ben & Jerry’s or Patagonia, which align their organizations’ missions to serve the public and profit-making.
As part of this, we can advocate for laws to codify and enforce against the practice corporate medicine, including limiting the ability of these organizations to fire doctors without due process when evaluating their decision-making.
Second, clinicians need to galvanize their efforts and advocate against corporate medicine through the American Medical Association (AMA), state medical societies, and grass roots organizations like Take Medicine Back.
Third, regular folks should remember that most clinicians truly care for us. Wait times and short interactions are likely driven by company-policies aimed at driving profit. There is nothing wrong with seeking a profit either.
It’s about balancing the need for giving and receiving quality care with reasonable profits for doing so.