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Doctors and Corporate Medical Practice

The Texas Medical Association and other medical groups are anticipating another

effort in the next legislature to allow private corporations to employ doctors. That’s

now against the law, and the TMA wants to keep it that way, as Jim Bell reports.


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It’s called the corporate practice of medicine and Texas is one of only a handful of states where it’s not allowed. In Texas, a doctor may not be employed by a lay person or paid a salary to provide medical services. Doctors cannot allow a lay person to make medical decisions, and HMOs cannot hire doctors as employees. There are exceptions to this, but the employed doctors maintain full control over how they treat their patients. Harris County Medical Society President Dr. Tom Garcia says the doctor’s autonomy is the issue here, and he worries what would happen if all corporations were allowed to employ doctors.

“Our concern is that the minute you take it out of that arena, then you can quickly see where Walmart comes in, HEB, Dow, Shell, anybody can, all of sudden ‘but we’re just gonna hire our own doctors.”

42 states allow doctors to work for corporations, and studies indicate almost no one is happy about it. Studies show that doctors in clinical practice look down on employed doctors for having poor skills and letting management tell them what to do. Managers don’t trust them completely because they’re often at odds with the company’s bottom-line mind-set.

Interviews have found that these doctors want to be good team players, so they go along to get along. Some say they feel pressures to write medical evaluations that favor management, administer tests they don’t believe in, breach patient confidentiality, discount evidence of hazardous substances in the workplace, and become extensions of the corporate legal department.  Dr. Tom Garcia says in that kind of setting the patient’s well being is secondary.

“It’s just normal you look at who’s signing the check and you start realizing ‘well I gotta please, you know, the boss’, right?”

Garcia says he thinks large companies would jump at the chance to put doctors on their payroll if the law is changed to allow it.

“Why wouldn’t they because all of a sudden they’re going to be able to tell those physicians ‘OK you want these patients to go back to work, or fire them.’ In other words they start dictating to them how to practice medicine.”

The prohibition against corporate medical practice isn’t total. The law allows exceptions, but not in private for profit businesses. Doctors can be employed by private not for profit hospitals, nonprofit medical schools, hospital districts, school districts, state agencies and institutions, nonprofit health organizations certified by the Texas Medical Board, just to name a few, and there are ongoing efforts to get hospitals in small towns and rural areas added to the exceptions. We’ll present that side of this issue this afternoon. 

Jim Bell, KUHF, Houston Public Radio News.

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