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A logo sign outside of the headquarters of UnitedHealth Group in Minnetonka, Minnesota on October 25, 2015.
Early last year the Oregon Statehouse passed the strictest prohibition on the corporate control of medicine in the country. It would have restored the ban on the corporate practice of medicine (CPOM) that has been in place in Oregon for decades by closing loopholes that enabled private equity and corporate conglomerates to offer the illusion of physician ownership of health care providers, while maintaining control over how those practices treat patients and deliver services. The idea was that medical professionals, not corporate executives, would be in charge of making medical decisions.
But a frenzied lobbying blitz stalled the bill’s progress in the Senate, where Republicans began to grumble about “unintended consequences.” The bill ultimately died what its most prominent backer described as a “process death” in early March.
Then, the state was hit by a series of relatively earth-shattering “unintended consequences” of corporatized medicine.
First, primary care practices across the nation began to realize they were broke. The week the bill died, a large 11-clinic primary care practice in Corvallis, Oregon held an emergency meeting of its physician-shareholders where all agreed to work without pay so cash could be conserved for staff salaries.
The culprit was a company called Change Healthcare, a massive medical claims processing empire that had just been hacked by a ransomware gang and quietly taken offline by its insurance juggernaut owner, UnitedHealth.
As it happened, the Corvallis Clinic was in the process of selling itself to UnitedHealth’s medical practice arm, Optum. The transaction was controversial, because the company’s recent acquisition spree in the state had not gone well, and disgruntled patients and doctors had inundated the Oregon Health Authority with letters urging them to reject the deal. While unlikely to block the deal outright, the agency had begun a dialogue with UnitedHealth about conditions it planned to impose on the takeover, like a requirement that Corvallis maintain all of its current specialties, and promise not to drop Medicaid or Medicare patients for some period of time.
But the health care colossus did not want to make any such promises. Optum’s primary purpose was to funnel patients to UnitedHealth insurance plans, and it was very aggressive about dropping patients it didn’t deem profitable enough—so much so that doctors didn’t want to work for them. In fact, the company had begun to blanket the state with letters to thousands of patients of the recently acquired Oregon Medical Group (OMG) informing them they had been terminated as patients, in large part because a few dozen clinicians decided to leave the practice.
Meanwhile, as a condition of bailing out the practice its faulty systems were bankrupting, UnitedHealth forced Corvallis Clinic to request an exemption from the health department’s customary review process. When the Prospect broke that story last March, no one was more outraged than OMG’s newly fired patients, many of whom would later rally around the bill.
One of OMG’s newly dropped patients was Lisa Fragala, a teacher and longtime community college board member who had recently been diagnosed with breast cancer. Fragala had been considering running for elected office after her state representative announced his retirement; the attorney who planned to run for the seat was reviled by a couple of the state’s progressive elders, most prominently beloved longtime congressman Peter DeFazio. Fragala jumped in the race; as she knocked on doors and shook hands at community events, she met dozens of fellow abandoned OMG patients, many of whom became volunteers and supporters. She would end up winning the primary by overwhelming margins, and became a key supporter of the bill.
Back in Salem, the state capital, Ben Bowman, the freshman legislator who had introduced and drafted the corporate medicine ban with help from a group of health care law experts, was voted majority leader of the Oregon House. Last May, he began hosting regular Zoom sessions to discuss how to improve the bill for the 2025 full-year session (even-numbered years have 35-day “short sessions” in Oregon). The first meeting drew 85 doctors, regulators, and health care executives. Republican state representative Cyrus Javadi, a practicing dentist who had supported the bill the first time around, helped galvanize local health care professionals around the movement.
And in Eugene, the local news began to probe why so many doctors had left OMG. Doctors like Amandajo Sanders, who had been acquired in the transaction, described how Optum had purged the support staff and given them hundreds of new patients while cutting their pay. Phone systems were disconnected to cut administrative staff and force patients to communicate their concerns online, and the workplace became dysfunctional. Doctors described feeling like “zombies,” and those who gave up and left were told that alerting their patients to their departures would violate the non-compete agreements they had signed as a condition of closing the deal. A retired ornithology professor who was among the “fired” patients told NPR that Optum had told him and other patients it would find them new providers—if they agreed to enroll in a UnitedHealth insurance plan.
But as the experience of one nurse practitioner in neighboring Washington state shows, oftentimes that new “provider” was just a full-time algorithm-assisted revenue-maximizer, trained to diagnose maladies that didn’t exist and occasionally administer the illusion of health care when patients became overly disgruntled with their abandonment at the hands of Optum’s chronically short-staffed clinics. Sure enough, an Oregon Health Authority review released earlier this year found that despite Optum’s savage cost-cutting throughout the enterprise, the “cost of care” for Oregon Medical Group patients rose 6.5 percent in 2024, far outpacing most of its peers.
These facts formed another key plank of the bill: banning noncompetes for health care practitioners, to prevent the OMG situation from repeating. Bowman also strengthened the bill in one critical way when he formally reintroduced it in February: He required all clinics to comply with its requirements within three years, down from seven last year.
MUCH OF WHAT DOCTORS and patients loathe about UnitedHealth and Optum is potentially illegal; the Justice Department is currently investigating the company for criminal Medicare fraud along with a host of antitrust violations ranging from anticompetitive serial mergers to illegal steering and predatory employment contracts. But most of those offenses are symptoms of a simpler, more existential problem: the conflict that arises when a doctor is being bossed around by an entity only concerned with profit, as “fired” Optum patients David and Judith Berg wrote in a letter urging the state senate to pass the bill: “Imagine! A health insurer owning the medical practice whose patients it insures! Talk about the fox guarding the henhouse. Duh!”
As inured as Americans have become to profit-centered health care, most states have for the better part of a century banned the ownership of medical practices by individuals other than licensed physicians. As Javadi, the GOP dentist, was fond of reminding detractors, Oregon’s own CPOM ban dates back to 1947, back when doctors “understood that health care isn’t just a business, it’s personal.”
Over time, CPOM bans were circumvented and undermined in many ways, but probably the most common was the “straw doctor,” a physician who would agree to titularly “own” a shell company subsidiary that would in turn employ other physicians on a company’s behalf. The Oregon law for the first time explicitly bans this practice, and further bars any physician-owner of an Oregon medical practice from holding shares in a company serving as a “management services organization” (MSO) vendor to that company. Conglomerates are free under the bill to invest in health providers; they just can’t control how those providers treat patients. As Javadi sold it, the bill was little more than a commonsense interpretation of the 1947 law for the private equity age; the nostalgic pitch won over six of his 23 GOP colleagues.
Combined with Senate passage in April, the 41-16 victory in the House sent the bill to Gov. Tina Kotek, who signed it this week.
Detractors (including Amazon, through its health care acquisition One Medical) have moaned that the law’s passage would send major health care investors stampeding out of the state. But when the deepest-pocketed company in health care began shuttering clinics and hemorrhaging doctors even after defeating the bill, that threat lost some of its salience. On May 28, the day the bill passed the House, Optum announced it was shutting down its primary OB/GYN practice.
THE OREGON BILL'S PASSAGE comes amid an otherwise bleak year for American physicians. The Trump administration has slashed or halted funding to thousands of medical research efforts valued at billions of dollars, the Big Beautiful Bill is slated to carve an almost incomprehensible $800 billion out of the budget for Medicaid, vaccines and fluoridated water are under siege, and Trump just commuted the sentence of his umpteenth Medicare fraudster. Over the past year the private equity looters who extracted some $2 billion in fraudulent dividends and fees from the hospital chains Prospect Health and Steward Health have shut down a dozen safety net hospitals while paying the top-shelf attorneys who have ensured their impunity with retirement funds stolen from their former physicians. Democratic governors in states reeling from thousands of hospital jobs and beds lost to those private equity heists have repeatedly failed to meet the moment, with California Gov. Gavin Newsom vetoing a law to give the attorney general oversight over private equity health care transactions (and strengthen that state’s CPOM ban) last fall, and Connecticut Gov. Ned Lamont this month sinking a bill proposed by a state senator and pulmonologist that would given the state attorney general oversight over major health care transactions in the state.
Yet in Oregon, reform was able to break through. Bowman is fond of telling the story of a lobbyist who visited his office to argue against the bill. His client was a health care company that didn’t have any practices at all in Oregon; the pitch was that the client didn’t want the bill to pass because it might become a national model and spread to other states, affecting the client’s operations. It was a blunt admission of how big corporations try to strangle reforms before they catch on, and the lobbyist may just be right.
The contagion may already be spreading. Indiana is implementing a significant price-setting law for hospitals. Several states are working on limiting hospital mergers. And Arkansas has banned pharmacy benefit manager middlemen from operating pharmacies in the state, effectively forcing out the pharmacies of CVS and UnitedHealth, owners of two of the “big three” pharmacy benefit managers.
If there is one secret ingredient one might credit for pushing Oregon and other reforms over the finish line, it is the murder of an insurance company CEO at the alleged hands of the chiseled young Unabomber disciple Luigi Mangione, which catapulted the abuses of UnitedHealth into the tabloid media and probably played a role in the Trump DOJ’s reported decision to upgrade its Medicare fraud investigation into the company from civil to criminal.
“So much evil had to happen for this bill to pass,” marveled Marco Fernandez, an Illinois anesthesiologist whose Association for Independent Medicine rallied physicians to submit public comments in support of the Bowman bill. “So many doctors had to quit the profession they had spent half their life to attain, so many patients had to be harmed, so much money had to be wasted, before everyone was able to see that the system is set up to support monopolies and not society. And unless you have physicians really unite and push back, until all of us understand that free market fundamentalism is set up for corporations and not for society, these guys are gonna be ten steps ahead of us.”
