Oncology News Central (ONC)Private Equity Surge in Oncology Warrants Stronger Laws, Experts Argue

As private equity firms increasingly acquire specialty medical practices, experts call for a reexamination of century-old Corporate Practice of Medicine doctrines.

In a rapidly evolving healthcare landscape, private equity firms are acquiring more oncology and specialty practices than ever before. This trend is sparking a renewed debate among healthcare professionals and legal experts about the relevance and effectiveness of Corporate Practice of Medicine (CPOM) doctrines, which were originally designed to protect physicians’ autonomy and clinical decisions.

HCN Medical Memo
The increasing involvement of private equity firms in medical practices is a double-edged sword. Although it may bring in additional resources and modernization, it also poses significant ethical and operational challenges, particularly in balancing clinical decisions against business pressures. It’s crucial for physicians, pharmacists, and nurses to be aware of these dynamics and advocate for legal frameworks that prioritize patient care over profits.

Key Points

• Private equity firms are increasingly purchasing oncology and other specialty practices, prompting experts to call for a reevaluation of CPOM laws.
• Nearly 75% of US physicians are salaried employees, and half of all practices are owned by a hospital or corporate entity.
• An analysis in JAMA Internal Medicine found that 724 oncology clinics became affiliated with private equity-backed companies between 2003 and 2022, representing about 10% of US practices.
• CPOM laws vary by state, with California and Texas having strong protections, while Florida and Oregon have weaker ones.

“What we don’t want is like a straw man, someone who’s an executive who happens to have an MD but is just on the payroll of the private equity company or the management company being inserted at the top of the professional corporation for the practice to make it look like, ‘Oh yeah, there’s a doctor in charge. Just trust us'”
– Erin Fuse Brown, JD, MPH, senior author of the article and director of the Center for Law, Health & Society at Georgia State University in Atlanta

Additional Points

• Companies often navigate CPOM requirements by using a management-services organization (MSO) model, which allows them to exert de facto control over medical practices.
• Patient care can suffer due to a focus on revenues, including staffing cuts and increased patient volume.
• Private equity firms are particularly interested in oncology due to its profitability.

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