Physician’s Contract Ordeal Reveals Flaws in Corporate Practice of Medicine Laws

Rheumatologist Jason Liebowitz, MD, was “really enjoying” his job at a physician-owned practice when, about a year in, it was acquired by a private equity group.

The day-to-day didn’t change much, he said. But a major stressor came when he was told that his new contract would include a 2-year, 100-mile non-compete clause.

“It really was a huge distractor for me,” Liebowitz told MedPage Today. The feeling was in stark contrast to wanting to focus on “being present with patients” and “being thoughtful in my approach.”

“I enjoyed working there, I didn’t want to leave,” he said. But his efforts to discuss his concerns regarding the non-compete left him with little choice.

Liebowitz, who now works at Columbia University in New York, shared his experience and concerns in a letter published in JAMA Internal Medicine, which he wrote in response to a survey of internal medicine physicians that showed most held negative views of private equity involvement in healthcare.

“When I asked if this clause was negotiable, I was told that the only people who could make that decision were the corporate leaders of the firm; not a single physician leader in the organization had the power to discuss this stipulation,” he wrote in the letter. “I was left to deal only with businesspeople, who made it clear that I was a replaceable cog in the machinery of the practice.”

Liebowitz told MedPage Today that he felt like “an asset to this practice … garnering a good reputation, building a panel of patients, doing all of the things someone would want to see the doctors in their practice do. But it seemed in our discussions, I was pretty replaceable in their eyes.”

He said there was a lot of pressure to sign the new contract or find another job. So, ultimately, Liebowitz found another job.

Doctors should be focusing on “how [private equity] firms are skirting laws that are in place to prevent undue influence of nonphysicians over the practice of medicine,” he wrote in the letter.

Typically, in states with corporate practice of medicine laws, “professional service entities are only entitled to practice medicine if they are owned by physicians licensed in that state.”

Though private equity firms “often place a licensed physician in a leadership role to comply with these laws,” he continued, “in practice, a non-physician makes all important decisions and greatly influences patient care.”

“If no one starts to stand up and question whether this is the best path forward for the field of medicine as a whole, I think it will continue,” Liebowitz cautioned.

He expressed a desire for further conversations about enforcement when it comes to corporate practice of medicine laws. He also called the FTC’s recent ban on non-competes a positive step in terms of helping to address physician concerns regarding corporate ownership in healthcare.

“I am ultimately an optimist,” Liebowitz said, adding that there are still “so many doctors who are doing the right things,” and that he believes there are many organizational models that can aid them in doing so.

Though an era of solo practitioners or small practices may no longer make sense in certain parts of the country, “there can be a middle ground,” he said. For instance, one can strike a balance between factors like economies of scale and the necessary support for physicians who want to provide quality care to patients.

Please enable JavaScript to view the

comments powered by Disqus.