AMA to corporate overlords: Doctors, not investors, must run physician practices

Physicians, not corporate investors, are best equipped to own medical practices and guide the clinical and business processes that take place in them, according to the American Medical Association (AMA).

This week, physicians and medical students adopted a “sweeping policy” that refines and reaffirms AMA’s longstanding opposition to corporate practice of medicine. It was one of the policy stances emerging from AMA’s annual meeting of its House of Delegates in Chicago.

The goal: protect physician autonomy and patient care from corporate bean counters willing to sacrifice needed and appropriate treatments in favor of profits.

“The new language reinforces that physician practices should remain under the ownership, governance, and clinical control of licensed physicians, and it explicitly opposes corporate arrangements that are thought to allow non-licensed entities to exercise direct or indirect control over medical practice,” AMA’s announcement said.

"The House of Delegates has taken a bold step to protect the integrity of the patient-physician relationship and ensure that medical decisions remain in the hands of physicians rather than corporate interests," AMA Board of Trustees member Marta J. Van Beek, MD, MPH, said in the news release.

AMA members approved revisions that explicitly state physician practices delivering medical care should be majority owned by actively practicing licensed physicians. Those doctors must retain final authority over clinical decisions and operational matters affecting patients.

The policy directly targets private equity ownership and other corporate arrangements that the AMA says may undermine physician independence. It opposes specific ownership structures and contractual mechanisms that would allow non-licensed entities to exercise direct or indirect control over medical practice.

“The AMA has warned that corporate intrusion threatens patient-centered care, can erode the ethical patient-physician relationship, and creates conflicts of interest between corporate profit and best medical practices,” Van Beek said in the announcement. “The House of Delegates has reaffirmed the principle that medical decisions should be guided by clinical expertise and patient welfare, not corporate priorities.”

Among the most notable provisions, the new policy opposes noncompetition, nondisclosure, non-disparagement and non-interference clauses that restrict a physician's ability to exercise independent professional judgment, advocate for patients, report unsafe or unethical conditions, or continue caring for patients in accordance with their ethical and legal obligations.

The policy also calls for greater transparency around practice ownership, governance structures, management agreements and contractual control rights.

The AMA's action reflects growing concern in medicine and state legislatures over the expanding role of private equity and other corporate investors in health care. The policy mirrors emerging state-level proposals seeking to preserve physician control over clinical decision-making and ban certain contractual arrangements between physicians and management organizations.

The new language stops short of prohibiting physicians from entering business relationships with investors or management companies. Rather, it establishes that such arrangements must remain subordinate to physician ownership, governance and professional medical judgment.