DOJ/FTC Request for Information on Merger Enforcement
Comments from the American Academy of Emergency Medicine
Thank you for looking into this important issue. In 2018, the AMA conducted their yearly Physician Practices Benchmark Survey and concluded that for the first time, more physicians were employees rather than owners of their practices1. While this may not seem like a significant finding, the systematic consolidation and buy-out of private practice physicians is detrimental to both patients and physicians. Physicians take the Hippocratic oath upon embarking in the practice of medicine, an ethical code of conduct which requires that their duty be first and foremost to their patients. This code obligates physicians to put the needs of the patients first, both in the practice of medicine and their business; whereas, non-physician owned/operated practices lack this ethical code, leading to poor patient care and higher healthcare costs to patients. The most deleterious of these employers are Emergency Department corporate management groups (CMGs) with private equity backing and/or ownership (Teamhealth, Envision (previously Emcare), APP, Schumacher, USACS, etc.). Emergency departments act as the safety net for medical care in this country, providing care to patients in their most vulnerable moments. While these companies argue that they have no undue effect on physician practice, this could not be further from the truth.
CMGs obtain contracts from hospitals to staff the emergency department on a small scale and turn these into larger consolidations over time, dominating entire hospital networks and geographical regions. Due to the piecemeal nature of the acquisitions, these mergers are often overlooked as a source of anti-competitive and unfair business practices. Additionally, thirty-three states have instituted the corporate practice of medicine (CPOM) doctrine, a law prohibiting layperson ownership of medical practices. However, these laws are often not enforced or bypassed through “paper owners”. For example, the recent wrongful termination case of Brovont v. Emcare [2,3] illustrated that a single physician “owner” who was not involved in the daily operations was listed on hundreds of subsidiaries’ contracts, even in states like Texas with strong existing CPOM laws. Often when CPOM laws are enforced, the punitive fines imposed are small and seen as “the cost of doing business,” because what is a $400,000 fine in comparison to hundreds of millions in revenue to a private equity backed company[4]? To curtail the corporate abuses of one CMG, the American Academy of Emergency Medicine Physician Group has brought a lawsuit against Envision in the state of California for the illegal corporate practice of medicine.
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