Resurrection of the Prohibition on the Corporate Practice of Medicine: Teaching Old Dogma New Tricks

Unfortunately, the federal government has become a willing participant in the risk-sharing strategy. The federal government has undermined the corporate practice doctrine and has adopted risk-sharing strategies of its own. The federal government needs to embrace the prohibition on the corporate practice of medicine in order to prevent insurance companies from shifting the financing function to physicians. Only then can we reveal the true costs of maintaining the system of private health insurance. Part II of this Article will examine the premises underlying the corporate practice of medicine doctrine. This Part will reveal that the doctrine resulted from a mixture of protectionist motives on the part of organized medicine and an idealized conception of the physician-patient relationship by the courts. Part III will examine how federal policy helped lead to the demise of the doctrine. This Part will reveal that the federal government was more concerned about cost containment than with preserving an idealized physician-patient relationship. Part IV will describe the financial risk-shifting mechanisms that have arisen in response to the need to control health care costs. Part V will explain how risk sharing is either dangerous because of its potential to alter the physician-patient relationship, or dishonest because it merely allows private sector payers to benefit from a hidden public subsidy. Part VI will examine how a healthy respect for the rationales underlying the corporate practice doctrine would lead to a prohibition on risk-sharing arrangements. Part V1I then describes the inadequate federal response to risksharing arrangements. Finally, Part VIII describes why the danger and dishonesty of risk sharing cannot be ameliorated by any means other than a blanket prohibition on the practice