Guest Post: A close look at healthcare as big business

There is money to be made by consolidating and rationalizing health care into big businesses.

That’s why it is happening.

If the goal is good health care, it’s a bad idea.

My friend Bruce Van Zee is a retired physician. He, too, writes commentary in a web log: https://substack.com/@bvzcvz. His latest post appeared there yesterday.

A process is underway in the U.S. that I liken to the absorption of small family farms into corporate ones, which took place over the 20th century and continues. The economic forces corporatizing health care, changing its goal from community health to profit-seeking, are moving much faster. They work inside insurance companies, government reimbursers, and physician and hospital offices. Van Zee spent a career inside medicine, practicing in Medford. Southern Oregon’s large regional hospital, Asante, is a community-owned nonprofit with a board of directors. Great forces are pushing Asante and every other health care provider toward economic profit, but we still have choices, and they are the community's to make. That means we need to pay attention.

Guest Post by Bruce Van Zee

I shared concerns about increasing corporatization of health care in earlier posts (here) and (here). Additionally, a WSJ series on the big for-profit conglomerates and their impact on cost of the Medicare Advantage program showed the many ways for-profit companies and private equity are being attracted to the health care markets. 

Suffice to say that there is little data that these increasingly prevalent conglomerates and national players improve the quality of care but lots of evidence that they increase costs. And in some well demonstrated cases (denial of care requests, restrictive provider panels) they sacrifice delivery of care to increase profits. In our own backyard, private equity companies and out of area management companies have taken over many the of veterinary care clinics in Southern Oregon with a demonstrable increase in pricing, but not so much in service or quality. The focus of my post today is whether we might be seeing encroachment by management on clinical services in Rogue Valley’s health care systems, specifically Asante Health system in Southern Oregon

Nationally, in response to corporate inroads, states have enacted corporate practice of medicine acts (CPOM) designed to protect clinical decision making from corporate control. Oregon passed a revision of its CPOM in July 2025, Senate bill 951. The first test was a lawsuit by Eugene Emergency Physicians against their prior employer of 35 years, Peace Health in Eugene, Oregon. Peace Health is a Washington based non-profit Catholic system that operates nine hospitals and other clinics throughout the Northwest including Sacred Heart Medical Center in Eugene.

The saga began when Peace Health notified Eugene Emergency Physician group of its intent to terminate their relationship and replace them with a corporate group newly formed and wholly controlled by ApolloMD out of Georgia. The judge hearing the case felt that the legal arrangements of ApolloMD were analogous to a shell company practice management firm and violated Oregon’s CPOM. Peace Health subsequently agreed to recontract with Eugene Emergency Physicians. The constraints and intent of the CPOM held.

Hospitals are generally excluded from some of the CPOM restrictions, but there is deepening concern about changes taking place in Asante hospital systems in Medford, Oregon; although there is no evidence of outside private equity or other corporate player (and Asante administration denies any plans for sale or merger). But the same encroachment of clinical decision making can occur in not-for-profit systems for other reasons (here). Over the past year or so, Asante administration has fired all 9 neonatologists at Rogue Regional Medical Center, terminated the contract of their hospitalist physicians, terminated discussions with Oregon Health Authority about plans to purchase an outpatient surgery center (and then purchased the real estate for $10 million and shuttered it with no disclosed plans for its future purpose).

It appears the contract terminations and firings of physicians were because of resistance to some requests of administration to modify clinical practices rather than medical errors or incompetence. Administration assures us that the terminated physicians will be replaced – will it include temporary physicians, nurse practitioners, physician assistants? It appears that Asante wishes to contract individually with replacement physicians and providers to exert more control. Some of them will be short term contracted physicians who may not even live in the valley. While most nurse practitioners and PA’s show good outcomes and metrics with outpatient care, the more urgent critical nature of inpatient illness may require higher levels of training and could result in lower quality outcomes.

Asante management has expressed frustration and irritation at the Oregon Health Authority, Oregon’s Corporate Practice of Medicine act (Senate bill 951), and Oregon’s Health Care Market Oversight (HCMO). The Oregon Health Authority’s employs the HCMO for review of mergers and acquisitions. While there may be legitimate concerns about occasional excessive red tape, the intent of the CPOM is to assure physician and provider clinical judgment is not usurped by administration. And the intent of the Market Oversight law is to protect consumers from harmful consolidation and predatory practices.

Asante is also involved in contentious negotiations with the ONA for a new nursing contract. A satellite facility, Ashland Community Hospital has been significantly downsized. Asante’s website FAQ’s confirms plans for the release of approximately 300 employees following as many as 400 in the past two years. The impact of these changes on the staff and employees of Asante has led to many departures, resignations, and physicians leaving the area, causing shortages of access to needed care and prolonged waiting times for appointments. Staff and physician morale have suffered. Recruiting seems to be negatively impacted.

Asante management has claimed these changes are all needed because of significant financial “headwinds”. Concerned and knowledgeable observers note, however, that Asante’s financials appear reasonably stable with positive margins through the latest release of fiscal year 2025 and a consistently excellent bond rating by Fitch. But the future financial health of Asante may well be negatively impacted by the loss of FEMA funds (that were awarded during the pandemic) and the severe Medicaid cuts by the OBBBA. These are challenges many hospitals face, particularly in rural areas.

Clearly, the collaborative relationship and trust between many health care providers and administration have broken down as administration seeks more control over traditionally clinical areas in which physicians had voice. And a robust, trusting relationship between clinical staff and administration is needed if these barriers to financial sustainability and quality of care are to be overcome. Management moved recently to change Asante’s bylaws to further exclude physician input and even those of Board members not on the executive committee. We hear from many physicians and nurses that there has been no collaboration between parties, only seemingly top-down decisions without a clear long-term strategy to stabilize and improve quality and access to care.

At this writing, all the facts are not publicly available nor is the long-term strategic plan for these changes clear. But concern for the quality of care that traditionally has been a source of community pride is growing. Over the years, Asante garnered awards for excellence because of the collaboration of administration and the clinical staff. That is being threatened in the current atmosphere. Administration can set the stage for clinical quality of care by virtue of its policies. But ultimately, only clinicians can deliver excellent quality of care. And current policies and actions by Asante are making that problematic.

It is incumbent upon the Asante Board in its oversight role to examine these disturbing trends and provide transparency to the hospital staff, providers, and the larger community, but so far Asante Board members have refused requests for a dialogue. The Board seems to have lost its voice. Let’s hope that changes. While board members should not be involved in micro-management, they have an overriding duty of oversight and loyalty to the institutional mission and are ultimately responsible for administrative actions. It is past time for them to step up.

 

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