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Victory for quality, low-cost healthcare in Idaho

Victory for quality, low-cost healthcare in Idaho

Wayne Hoffman
September 9, 2016
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September 9, 2016

A few years ago, an Idaho businessman told me he wanted to hire a doctor to work with his employees, as a perk, to increase their quality of care and help keep insurance costs down. Idaho’s medical regulators rejected his idea because of a thinly-supported legal doctrine advanced by Gem State special interests since the 1950s.

But, last March, Idaho’s Board of Medicine quietly voted to “disavow” that 60-year-long prohibition on the “corporate practice of medicine.” Under the corporate practice of medicine doctrine, licensed doctors could only work for other licensed medical practitioners. That obstacle is why a Walmart, Micron or Chobani hasn’t been able to hire a doctor to care for its employees or customers.

Proponents of the ban contend the corporate practice of medicine would lead to unqualified business people directing medical care. The argument: Treatment would become substandard because businesses are driven to keep costs down or maximize profits.

The real reason for the prohibition stems from special interests who didn’t  like competition, who wanted to control the profession and wanted to increase physician earnings. There was a time when mining, timber and railroads in particular had their own doctors on the payroll, which benefited their employees. But, the government restriction eliminated those voluntary private sector arrangements.

The corporate practice of medicine restriction is found nowhere in Idaho law. It’s a legal construct that was enforced by the state Board of Medicine, which originates from a 1952 Idaho Supreme Court ruling. In 1998 and again in 2007, the board’s contract attorney, Jean Uranga, issued memos which opined that the board was within its authority to ban the corporate practice of medicine.

Uranga argued that the restriction doesn’t apply to hospitals, because those facilities, and others like them, are licensed under other areas of Idaho law. But, Uranga wrote, “it is my opinion that the corporate practice of medicine prohibits unlicensed corporations and entities from hiring physicians as employees to provide medical services to patients.”

A 2011 Idaho Law Review article by Michelle Gustavson and Nicholas Taylor argue that the board was acting beyond its authority. The authors also contend that the restriction was harming the delivery of healthcare services in the state.

“Proponents of the corporate practice of medicine doctrine assert that corporate influence will decrease the level of patient care. The fear is that the big bad corporation will place its profit margin above quality patient care,” Gustavson and Taylor wrote. “However, this fear is misplaced.”

The Board of Medicine, for its part, isn’t saying much about its reversal, but the decision appears to stem from threatened legal action. During a 22-minute telephone meeting in March, most of which took place in private, the board voted to rescind its longstanding policy. The board noted, “in the past, occasionally the Idaho State Board of Medicine has disciplined physicians for aiding and abetting the unlicensed practice of medicine by working for unlicensed entities or persons, sometimes known as the ‘corporate practice of medicine doctrine.’ The Idaho State Board of Medicine hereby formally disavows and rejects the ‘corporate practice of medicine doctrine.’”

The board also voted to rescind an action taken against a physician in 2013 and close an investigation against another physician in 2015. Information about either case is not available on the board’s website, and the agency has yet to respond to a public records request for the documents.

Today, special interests argue for all kinds of government intervention in the healthcare marketplace, be it Medicaid expansion or a restriction on the kinds of services doctors are allowed to offer. Today, one more barrier to quality healthcare in Idaho is gone.

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