Protect the Ban on the Corporate Practice of Medicine

SB 726 (Ashburn), a bill that would erode the patient protections of the bar on the corporate practice of medicine in California, has been taken off the inactive file and can be voted on as early as this week on the Assembly Floor.

The bill is sponsored by AFSCME, a labor union interested in unionizing doctors, and the California Association of Healthcare Districts, whose members want to hire and control physician services. Your action today is of utmost importance.

We ask that you and your colleagues CALL, EMAIL, or FAX Assembly members and urge them to Vote No on SB 726.

Please call (877) 362-8455, our new Legislator Connect Hotline, in order to be easily connected to your Assemblymember. You will be asked to enter your ZIP code and select your Assemblymember.

Give your name, specialty and let them know that you are their constituent.

Phone calls are most effective, but emails and faxes are important too. If you or your colleagues choose to submit an email or fax to your legislator(s), we strongly encourage that you personalize the letter, which will greatly increase its impact. Click here to locate your Assemblymember by ZIP code.

Please be advised that the unions and hospitals are urging their members and other physicians to call to register support so your participation is absolutely necessary . Legislators need to know the true impact this bill would have in their districts.

Talking Points:

• The ban on corporations practicing medicine is an important protection for patients in California hospitals. The "corporate bar" ensures that those who make decisions affecting the provision of medical services (1) understand the quality of care implications of that medical service; (2) have a professional ethical obligation to place the patient's interest first; (3) are subject to oversight of the Medical Board of California.
• SB 726 will erode the quality of care in California hospitals. The bill will give hospital CEOs and administrative staff, who have different motivations, control over physicians who should be making treatment decisions. This will create conflicted loyalties in an institution that must remain true to the patient's interests, and will erode the quality of care patients receive in California hospitals.
• Placing doctors under the oversight of hospital administrators and CEOs who are under enormous pressures to cut costs or increase revenue will threaten the independent medical judgment necessary to ensure patients are protected. A recently released study shows the hospitals' interest in acquiring physician practices is based on financial and anti-competitive motivations, not just to increase access for patients.
• Hospitals are already interfering with medical staffs' ability to ensure quality care through independent self-governance. For example, some hospitals have adopted medical management protocols which have resulted in inappropriate hospital tests, procedures, and stays, jeopardizing patients and increasing costs.
• Allowing a hospital to directly employ a physician will NOT increase access to physician services. The hospital will push patients to their preferred provider thereby controlling the competitive market. Other non-employed physicians will not be able to compete and likely be forced out of town, resulting in no increased access.
• CMA supports policies that will truly increase access to care, without compromising the quality of care. The CMA supported bills that now are providing over $2 million dollars in medical school loan repayment for physicians who agree to practice in these areas. Since loan repayment obligation is one of the primary reasons physicians will not go to underserved areas, this will attract physicians to these areas without compromising the quality of care patients receive.
• Hospital Districts already have numerous financial incentives they can use to recruit physicians. Proponents of eliminating the corporate bar, including hospital districts - have failed to show why allowing corporate entities to directly hire physicians would work where these incentives have failed. A list of incentives currently available to hospitals and hospitals districts include:
  • guarantee to a physician and surgeon a minimum income for a period of no more than three years from the opening of the physician and surgeon's practice,
  • guarantee purchases of necessary equipment by the physician and surgeon,
  • provide reduced rental rates of office space in any building owned by the district or any of its affiliated entities, and
  • provide other incentives to a physician and surgeon in exchange for consideration and upon terms and conditions the hospital district's board of directors deems reasonable and appropriate.

None of these incentives grant hospitals or hospital districts the control over the actions of physicians, which they seek through the ability to hire physicians — the real goal of eliminating the patient protections of the corporate bar.