The new Oregon law is the most difficult nation against the capital investment in health care

Diving brief:

• Earlier this week, Oregon Governor Tina Kotek has signed a law prohibiting non -doctors to own medical practices. The defenders claim that the law is the regulation at the highest state level which aimed to reduce investment capital in health care.
• The existing law obliges Oregon doctors to have at least 51% participation in most medical practices. However, the legislators said that companies were able to obtain property by employing doctors and listing them as owners of clinics. The new law aims to fill this gap.
• The law will not come into force immediately. It contains a three -year adjustment period for clinics. Hospitals, tribal health establishments and behavioral health programs are exempt from requirements.

Diving insight:

Oregon’s thrust to regulate the influence of investment capital in health care comes while the momentum is growing nationally to improve the monitoring of health agreements.

The recent collapse of the health care of the stewards and prospect Medical Holdings, which previously belonged to the Private Equity, only added fuel to this fire. The Massachusetts, New Mexico, Indiana and Washington have all adopted laws this year strengthening the monitoring of the state of health agreements. Meanwhile, Pennsylvania legislators weigh a similar proposal.

In Oregon, legislators have been forced to promulgate the law in part by testifying to the effects of investment capital and the ownership of companies in health care, according to Rep. Lisa Fragala, D-Eugen, Creswell.

In a press release, Fragala referred Oregon Medical Group, based in Eugene, which was acquired by Optum, owned by Unitedhealth, in 2020. Some doctors fled this practice after the acquisition, alleging that Optum has scored a culture that prioritized money and quotas. Facing a shortage of doctors, Oregon Medical Group told certain patients to ask for care elsewhere, according to an Oregon Live report.

“When we see consolidation in the health care market, we see three things happening: higher prices, negative effects on the quality of care and a decrease in access to care,” Fragala said in a statement. “Today, the Oregon Legislative Assembly has taken measures to deal with this crisis.”

The bill was supported by state nursing associations. However, Oregon Ambulatory Surgery Center Association expressed its concerns concerning the proposal, noting that private investment was the key to their strategy.

“In some communities, there is no hospital to rush to the rescue, or no hospital in financial situation to save a clinic” undergoing financial distress, the association wrote.

In an article on X, senator Elizabeth Warren, D-MASS., Defended the law, calling it “the strongest” protection against the profit of companies on books. Warren previously pleaded for stronger policies against investment capital, including criminal sanctions for business leaders if financial management leads to the death of a patient.

“The congress should follow and withdraw the investment capital of health care nationally,” said Warren.

Lawyers’ firms have also nicknamed Oregon Law The “most difficult barrier in the state” to investment capital in health care and the country’s “most aggressive” limit in participation in investment capital in the management of medical practice.