Doctors fight effort to allow hospitals to hire physicians

Should hospitals be permitted to hire doctors? The practice is allowed by most states but is against the law in California, which sees the practice as a corporate intrusion into the medical arts. The issue has simmered for months — indeed, years — in the Capitol, but it is coming to a head as the clock ticks down on the Friday midnight deadline for the Legisalature to adjourn.

The state board that regulates doctors, the public healthcare districts, the rural counties, the hospitals’ trade association, even the cofounder of the United Farm Workers, Delores Huerta, all want the law changed. The California Medical Association, which represents 35,000 doctors and is a powerful political player in the Capitol, is opposed.

“When a hospital can hire directly, it grants control over the physicians to the hospital’s CEO and staff who may have different motivations than the physician. They run hospitals to make them profitable,” said CMA spokeswoman Amber Pasricha Beck. “The CMA believes that a physician needs to remain true to a patient’s interests and protect that quality of care.”

In California’s 75 public healthcare districts, 46 and have hospitals, the rest of them have clinics and other health care facilities. They serve rural, frontier and medically underserved areas — precisely those areas where medical care is hard to get. With some exceptions, however, they can’t hire doctors to serve on their staffs because prohibitions that date from the 1930s bar hospitals from directly employing doctors. There are exceptions: UC medical centers, county hospitals, some community clinics, and some non-profit organizations can hire doctors, and current law contains several other specific exemptions to CPM, according to a legislative analysis.

The public hospitals believe the patients’ quality of care is severely eroded when sufficient doctors, particularly specialists, aren’t available in rural or inner-city areas, and that hospitals can provide the stable income that would lure young doctors to practice there.

Recruiting doctors to rural and under-served areas better serves the public with facilities that they finance through their own tax dollars, they add.

“It’s really a model of community health care,” said Peter D. Gambee, executive director of the Association of California Healthcare Districts. Recruiting doctors would be easier if they knew that they could earn a family-supporting income, Gambee added.

“Increasingly,  the percentage is going up for doctors who are looking for employment by a hospital or other health care facility. It has gone from single digits to nearly 50 percent. They are more than happy to work in some of these communities,” Gambee said, noting that under current conditions it is more difficult. “With 50 percent to 75 percent on Medi-Cal or uninsured in some of these communities, they can’t make a living.”

Assemblyman Sandre Swanson, D-Oakland, who authored similar legislation, agreed. “California’s physician-hiring ban has been and remains a significant barrier to the recruitment of doctors in these communities,” he said.

Gamby’s group wants to allow the hiring, on a limited basis. The ACHD is joined by the Medical Board of California — the state entity that enforces doctors’ conduct — and an array of other groups, including the Alliance of Retired Physicians and the Regional Council of Rural Counties. A key supporter is Delores Huerta, who along with the late Cesar Chavez founded the United Farm Workers. She says quality medical care is needed in rural, agricultural areas.

At least two bills, including Swanson’s, that with the physician-hiring issue, were blocked this year in the Legislature, while a third – SB 726 by Sen. Roy Ashburn, R-Bakersfield – remains alive.

Capitol observers in both parties said Ashburn’s bill faced a difficult time in the Senate, in part because of the extensive campaign mounted by the CMA, which has long been one of the Capitol’s most powerful political players. The public health care district has no political action committee.

“It’s like David and Goliath,” Gambee said.

Ed’s Note: Corrects spelling of Gambee throughout.

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