After facing overwhelming backlash and a lawsuit, PeaceHealth, a nonprofit health system, has reversed its decision to replace emergency physicians in Oregon with a national physician staffing chain.
In an announcement on Wednesday, PeaceHealth did not disclose the reason for its change of course. However, sources familiar with the situation indicated that the health system’s plan was likely to fail in court.
PeaceHealth’s Plan and the Legal Challenge
In February, PeaceHealth announced it would terminate its contract with Eugene Emergency Physicians, the local group that had staffed its Oregon hospitals for 35 years. The decision sparked significant opposition from doctors, nurses, lawmakers, mayors, and emergency medicine organizations.
On March 20, the Eugene emergency physicians filed a lawsuit against PeaceHealth. They argued that the health system’s plan to contract with Atlanta-based ApolloMD, a national physician staffing chain, violated Oregon’s Senate Bill 951. The law prohibits managed service organizations (MSOs) from directly owning medical practices or interfering with clinical decisions.
The case has since undergone four hearings, during which the presiding judge reportedly expressed strong concerns that PeaceHealth’s plan violated SB 951.
“The judge was quite clear that the scheme violated the law,” said Hayden Rooke-Ley, an attorney representing the doctors and a senior fellow for health care with the American Economic Liberties Project.
Implications of Oregon’s SB 951
Oregon’s Senate Bill 951, enacted to protect independent medical practices from corporate interference, played a pivotal role in the legal challenge. The law aims to prevent MSOs from exerting control over clinical decisions, ensuring that medical professionals retain autonomy in patient care.
PeaceHealth’s reversal underscores the challenges health systems face when attempting to restructure physician staffing arrangements in states with strict regulations on MSOs.
Related articles
Robert F. Kennedy Jr. Balances Vaccine Skepticism with Ohio Outreach Tour
Here in Washington, we’ve been hearing about tensions between the White House and one of its most controversial — but, at least in some circles, most...
Minnesota Lawmaker Proposes Redirecting Healthcare Tax to Boost Hospital Charity Care
Minnesota lawmakers are wrestling with how to sustain the state’s financially distressed hospitals while patients confront growing medical debt. One M...
Why Alcohol Remains Overlooked Despite Its Deadly Toll in the U.S.
Alcohol kills more Americans than any other drug by a wide margin. But discussions about substance use epidemics in the U.S. are usually centered arou...
Supreme Court Blocks Restrictions on Abortion Pill Mifepristone, Ensuring Continued Access
WASHINGTON — The Supreme Court on Thursday preserved women’s access to a drug used in the most common method of abortion, rejecting lower-court restri...
Dr. Makary's Exit and the Future of Cassidy's Senate Seat: Key Health Policy Shifts
This week’s episode of “The Readout LOUD” is all about health politics. We bring on FDA reporter Lizzy Lawrence to discuss Makary’s departure — why he...
STAT Unveils 'The Deadliest Drug' Investigation: Alcohol-Related Deaths Surpass 178,000 Annually in the U.S.
Dear Readers, I want to bring your attention to “The Deadliest Drug,” a new STAT investigative series about our nation’s failure to address excessive...
CDC to Relocate 160+ Monkeys to Sanctuary in Bid to End Animal Testing
As part of efforts to phase out the use of monkeys in research, the Centers for Disease Control and Prevention intends to transfer more than 160 macaq...
Who Will Lead the FDA Next? The Search for a New Commissioner Heats Up
You’re reading the web edition of D.C. Diagnosis, STAT’s twice-weekly newsletter about the politics and policy of health and medicine. Sign up here to...