California Bill Seeks to Prevent Hospital Administrators from Practicing Medicine Without a License

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Yves here. Thanks in large measure to the diligent reporting of the Health Care Renewal blog, as well as more recently the deep digging by Eileen Applebaum and Rosemary Batt on private equity’s major incursions into healthcare, we’ve been able to keep tabs on the corporatization of medicine and its detrimental effects on the quality of care. These changes have been implemented by MBA beancounters over the objections of practitioners. In cities where it’s viable to keep solo or small group practices, like New York City, some can keep serving their current patients. Some retire early. Some are able to morph their practices outside the insurance paradigm (like endocrinologists who become “anti-aging” specialists who dispense human growth hormone) and again escape corporate minders. Others like IM Doc flee for small cities where the big hospital system tendrils have yet to reach. But the net result of all of this is fewer patient-driven practitioners. Given the importance of the placebo effect alone, this shift hurts outcomes.

The latest post at Health Care Renewal reports on an important measure to restore more power to doctors: a proposed California bill to prevent health care administrators from practicing medicine. Oddly I’ve read nothing in the press about it. I strongly recommend circulating this post to everyone you know in California and urge them to urge their state Assemblyman and Senator to support this measure. Update: I was remiss in not flagging the bill number, SB 642, and a link to its text.

By Roy Poses, MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine. Originally published at Health Care Renewal

Health Care Renewal presents a guest post by Dr. Gene Dorio.  Dr Dorio  is a geriatric physician from the Santa Clarita Valley in California,  providing house calls to older adults.  He has been an advocate and whistleblower for his community leading several causes from attempting to preserve the hospital Transitional Care Unit for seniors in 2006, to today trying to allow admission of teens to the psychiatric unit.

He is President of the Los Angeles County Commission for Older Adults, an elected Assembly Member of the California Senior Legislature, serves on the Triple-A Council of California, and member of the Santa Clarita Valley Senior Center Advisory Board.

For 5 years, Dr. Dorio served on his hospital’s Medical Staff Executive Committee in several leadership roles including 3 years as Chairman of the Department of Medicine. 

Doctors are highly trained medical professionals trying to survive in a complex sociopolitical system.  We have been pawns utilized by hospitals and government for our knowledge and skills, yet more recently expected not to have a voice or opinion.

As a physician in private practice for 40 years, changes in the past 10 years have been difficult.  It was hard for me to hear non-medical business administrators force cut-rate medicine compromising evidence-based patient care.

I was elected to the hospital Medical Executive Committee (MEC) seven years ago with the hope from the inside I could improve threats against patient care.  This did not succeed and the fury coming from the hospital intensified as the self-governing MEC was swallowed up by the Board of Directors and Administration.

Doctor voices protecting patients diminished, and many whistleblowers were left to defend themselves from bullying and attacks.

Lies and insults persisted, and the only power I had was knocking out keyboard articles to social media as a shield.  Throughout the country, there were scant physicians in the same situation, so we networked the best we could to survive.  “Never give up” was our mantra.

Periodically murmurs could be heard, but it was always muffled.

This year in California, a law was introduced in the State Senate to keep hospital administrators from “practicing medicine without a license.”   Most doctors don’t know about it, but of course the state hospital association is diligently fighting it.

It can be seen here.

At the end of April, I was asked to testify at the State Senate Health Committee, and this is what I provided:


Good morning Mr. Chairman and members of the California Senate Health Committee.

My name is Gene Dorio, and I am a geriatric physician in Santa Clarita serving my community for 34 years.

Until two years ago, I was on staff at a local hospital which is a non-profit, but run like a for-profit hospital.  For 5 years, I served on the Medical Staff Executive Committee in several leadership roles including 3 years as Chairman of the Department of Medicine.

During my time there, I witnessed administrators use manipulative, clandestine tactics to capture each voting facet of the health facility, including the Board of Directors, contracted physician groups, and the Medical Staff so business people could make patient-care decisions.

At my hospital, business community members were appointed to the Board of Directors and provided lucrative contracts in exchange for their vote.  Bankers were given hospital accounts; a real estate agent was given property to rent; and a doctor was given space for a dialysis unit.

Exclusive Contracts were signed by physician groups for emergency room care, radiology, and operating room anesthesia.  The hospital could not technically practice medicine, but they coerced these groups with the threat of severing contracts if they did not adhere to their orders, or vote as told. Needless to say the administration got their votes, while the Medical Staff became only a shell of a self-governing body once devoted to improving patient care.

Eventually, the Medical Staff was taken over too, and our policies were changed to bring in more revenue—even when it was terrible for patients. My patients are geriatric, and at times clinging to life. Nonetheless, staff started to leave daily notes on my charts forcing me to discharge patients even though they were not ready to leave the hospital. These notes included a printed statement “Not a Part of the Medical Record” which was removed later by the Medical Records Department erasing hospital culpability.

Hospital administrators also knowingly wrote orders without doctor consent for Palliative Consults, to place patients on hospice care which financially benefits the hospital by getting them out of the hospital for care.

They also made decisions about medications patients could receive. They decided not to use insulin pens as they were too expensive, and instead jeopardized diabetic patient care using multi-source insulin vials which are less precise and easily contaminated.  The presiding CEO was released from their previous hospital after violating State Medi-Cal laws substituting inferior anesthesia in the labor and delivery department.

Hospitals also hold regular “throughput” meetings for physicians, where they publicly display the number of referrals, expensive tests, procedures, and overall revenue that each doctor is generating. They talk about productivity and efficiency—not the quality of patient care.

Because I tried to advocate for my patients, my hospital privileges were constantly in jeopardy. Typically, privileges are renewed every two years.  For me, it was every 4 months.

If hospital administrator actions were truly to improve healthcare for our patients, I would have no qualms.  But instead through abusive tactics and bullying, they interfere with physician decision-making, and ultimately increase administrator salaries, bankroll retirement portfolios, and yearly bonuses.

SB 642 is an important step to removing hospital administrators from practicing medicine without a license.  Their surreptitious plans taking over a non-profit hospital for their own personal benefit must be thwarted by this law.

Patients have entrusted physicians to be guardians of their health.  We are professionals that have taken a solemn oath to provide care in the best interest of the patient.  Therefore, SB 642 will serve Californians by putting medical decision-making back into the hands of patients and their doctors.

Thank you.


I have never testified before a legislative body, but this is where my keyboard has brought me.  There needs to be more voices fighting for patient care diminishing hospital administration power.  Doctors must be part of the balance providing better healthcare to citizens of our country, but we must hear you speak!

Follow that mantra, “Never Give Up!”

Gene Uzawa Dorio, M.D.

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  1. Phil in KC

    Dr. Dorio’s comments explain a lot about how the financialization of medicine has been to the detriment of patients–and doctors too, for their ethics are compromised by fiscal considerations. I work at a medical center nominally operated by a not-for-profit state university but actual medical care is in the hands of a for-profit corporation. I hear constantly from demoralized staff about these very problems–pushing patients out the door (at least the unprofitable ones), restricting access to therapies, and so on.

    Medicine and religion are two areas of human activity that should not have a profit motive.

  2. Carla

    Thank you for this very important post, Dr. Dorio and Yves. I will definitely share. This looks like it might be model legislation for other states.

  3. Susan the other

    A non-profit which is run for a profit. Why on earth are these “business plans” allowed? There’s no “non” profit involved. Only non-healthcare. Hospitals contract out everything. Emergency rooms; specialty clinics; labs; surgeries; imaging; billing. What oath does the corporation take? It would be interesting to make those contracts public. The terms could be so one-sided, ultimately for the shareholders, they’d never ever hold up in court; let alone the all-pervasive conflict of interest. I know from a close source that the docs who signed on to our new “hospital” signed up to keep costs down and their contracts reward them personally for doing so. But I think the whole thing is proving to be impossible to contain. The big corporate tactic of socializing losses can’t go on forever. Already this hospital, after 10 years of trying to make it work, has “merged” with another hospital system 1000 miles away in South Dakota. That tells me that neither system is making a profit and they think they can obfuscate a bit longer by creating synergies on paper which they will put in the “productivity” column – which will not translate into good healthcare, but only into profits. It’s a blatant scam.

    1. Angie Neer

      I used to work for a non-profit research business. It was not medical, but “non-profit run like a for-profit” is very familiar. I learned not to make the common mistake of conflating “non-profit” with “charitable”. As was explained to me when I was hired, “non-profit” simply means it has no external owners or shareholders. Which is nice, but the incentives aren’t that different: upper management wants to extract the maximum non-profit from the customers, and appropriate the largest possible share of the non-profit for themselves. The fact that none of the non-profit has to be paid outside the organization just makes that a little easier.

  4. fresno dan

    Nonetheless, staff started to leave daily notes on my charts forcing me to discharge patients even though they were not ready to leave the hospital. These notes included a printed statement “Not a Part of the Medical Record” which was removed later by the Medical Records Department erasing hospital culpability.
    reminds me of when I worked at FDA, and the constant struggle to make the administrative record complete, accurate, and truthful. It never occurred to people at the top to ask what the people over me were ACTUALLY contributing – apparently because it was their real job to hide who really made the decision and any facts that could call into question that decision. Also kinda reminds me of all the cops who “forget” to turn on their recording cams…and how there is no real consequence for that.
    The vast majority of real decisions in USA are hidden, obfuscated, or not recorded because it goes against the interest of money…

  5. pck

    This is incredibly disheartening, but I think I don’t understand hospital administrative structures enough to fully get it – could anyone clarify:

    The medical staff executive committee is presumably a group of doctors/nurses/patient-facing people who make collective decisions about how the hospital is run. Other hospital decisions are made by the board of directors and “contracted physician groups”?

    Are the contracted physician groups businesses that are external to the hospital, but the hospital contracts for specific jobs? So the hospital wouldn’t employ a radiologist, they would instead contract with “radiologists-r-us inc.” to have one work in the hospital? If so – how do hospitals decide what gets contracted out and what they actually do using their own employees?

    I think my confusion stems from the statement “The hospital could not technically practice medicine…” – but I’m confused about who “The hospital” actually refers to. Is that shorthand for hospital administrators? This is probably hopelessly naive, but I thought hospitals just employed doctors and nurses to take care of folks. The image I’m getting from this is that instead, a small set of administrators and accountants rent a building and contract with individual doctors (and control their “hospital privileges”) and doctor groups in order to provide healthcare, but no one is actually an employee of the hospital. Is the second one closer to the truth? Is that a new development? Is everything going to continue to get worse, forever?

    1. juno mas

      Most hospitals today are organized as “non-profit” corporations. (It’s a tax dodge). CEO of the hospital may, or may not, be and MD. The hospital employs mostly nursing staff, administrative staff, and other operations staff. They directly employ “resident doctors” (new to medicine) and some “hospitalist’s” (doctors without private practice). Your personal doctor isn’t employed by the local hospital, but has “hospital privileges” to care for you in the hospital if you need to be admitted. And any specialist doctor (Heart, Cancer, Pulmonary, etc.) you encounter there is likely to have a private practice and will bill you separately.

  6. PHLDenizen

    By way of example: a Propublica expose on the crapification of healthcare systems. Some doctors are in a position to push back, unfortunately most aren’t.

    Denizen Dad, by way of being a hospital chief, part of an enormous group of independent specialists, and being extremely well-regarded in the area, has been able to tell such PE firms to go f*** themselves and staunch the bloodletting such PE firms demand. But, as I said, he’s managed to accumulate enough clout to make that possible, as well as being able to prevent insurance companies from driving reimbursements to poverty wages.

    Internists and PCPs make s*** wages, which is unfortunate because there aren’t nearly enough good ones. Tacking on med school debt and laughably tiny reimbursements, it’s almost a vow of poverty for several years. Psychiatrists are also in the same boat, which is why almost all of them require cash. Insurance companies are hostile to any form of useful treatment for mental illness.

    Dad is also a dyed-in-the-wool Reagan Republican, but even he’s come around to think the AMA is completely out of touch and that universal healthcare is the only viable solution. 40+ years of watching your profession degenerate into having MBAs, who went to white collar crime trade schools, constantly destroy your ability to care for patients tends to change your perspective.

    I had to fire my dentist, as her practice got rolled up into a PE money grab. And finding a good dermatologist is also a PITA because the PE vultures are attracted to the large cash flows of non-covered, cash only cosmetic treatments.

    Then there were a couple of times i had panic attacks so severe I confused them with MI. And those ambo rides ended up being 2800.00 or so each, of which 400 was actually covered. I managed to get them down to a reasonable fee with enough effort, but it was exhausting.

    I’ve reached the point of deciding that working out regularly is sufficient enough to avoid interactions with any part of the system. If I drop dead, I drop dead. At least I’ll have saved enough time and energy to enjoy being alive vs the full time job of dealing with the misery machine.

    1. Arizona Slim

      Your final paragraph nails it. To the point where I’m stealing it and sharing it with people who wonder why I’m not living my life in waiting rooms and going from screening test to screening test.

  7. juno mas

    Hmm. Interesting article.

    Just his week i received a medical bill from my local clinic.(Paid for through Medicare.)

    The billing included an amount of $17 that was itemized to a doctor I did not visit: the “doctor” is the CEO of the medical clinic, who is an MD but doesn’t provide any medical services. Could this be an effort to circumvent the “non-practicing MD as CEO rules being proposed in CA?

  8. IM Doc

    How did this legislation escape me? I have been too busy this past year with COVID and all its complications. A very encouraging first step. I wish them well.

    I could write a novel about the problems. And all the ethical and moral complications that are current system engenders daily. I have heard that some scholars are re-branding physician burnout as “moral fatigue” and I could not agree more.

    All I will say here – I fought the system for decades. I finally realized I was mostly alone – and in order to protect my health and be a father to my children, my wife and I left the big “non-profit” ( that name is an evil joke) and moved out to the countryside. Medicine is much different here. But I can assure you, we have made the correct decision and I will never go back.

    I currently work at a taxpayer supported organization. The board members are up for election every 4 years and there is constant accountability for the leadership. It is a breath of fresh air. THEY ACTUALLY WORK FOR THE PATIENTS AND THE COMMUNITY. Is everything perfect? Of course not. Do I feel like I will burn in Hell for my daily sins like I did back in the big city? Not at all.

    Anyone who believes these “non-profit” corporate healthcare leaders have any kind of accountability like my leadership does here needs to get back on their meds.

    1. Carla

      IM Doc, I cannot tell you how enlightening and helpful your faithful commentary is, even when of necessity, sometimes, your message is discouraging or enraging. You are a vital sanity check for all of us trying to survive a crazy healthcare non-system. Many, many thanks.

  9. MaxFinger

    I have been reading about the takeovers for sometime now thanks to the many articles here at NC.
    Just yesterday I made an appointment with my PCP primary care physician only to find they have been transferred to Athena Health – Veritas Capital – Elliot Management.
    I ask the person that answered the phone if the practise had been taken over by another group. She assured me that my doctor was still there and the practise had not been taken over. Maybe she doesn’t even know about this takeover???
    I was told I had to login to a new portal that they just rolled out.
    All my medical records were gone from the new portal and I now was assigned to a PA-C who had just graduated and was a new hire at the end of 2020.
    This is a MD I have had for over 20 years.
    What little trust I had in the system is now gone.

    1. Acacia

      Recall the saintly POTUS uttering: “if you like your health care plan, you’ll be able to keep your health care plan.”

  10. Synoia

    The Hospital is now not there to provide Medical services. It is a real estate asset which delivers revenue to its owners.

    That the activity in the hospital is medical is a side issue. If it could yield higher cash flow with some other set of tenants for the space, its medical use would disappear very quickly.

  11. Gregory Etchason

    Primary care MDs of all description are being replaced with cheaper more compliant NP.
    Corporate Medicine discounts expertise with specious MD /NP equivalence. Corp medicine also loves NP because testing and imaging are utilized inversely to a “provider’s” training and experience

  12. Stephen Taylor

    When my mother had a heart attack in 2018, my sister and I had a terrible time dealing with the hospital where she was admitted.

    A great deal of the problem came from interactions with a doctor who identified herself as a “hospitalist”–word of advice: if you see a “hospitalist” walking toward you, run in the other direction. She was one of the primary figures who led the charge to boot my mother out of the hospital, despite the fact that she clearly was not getting better and clearly needed serious medical attention.

    At one point, I looked at the hospital’s website for its roster of doctors; I found most of the many doctors who attended my mother for one thing or another on the listing; the “hospitalist” was nowhere to be found on the site. I suspected all along that she was in fact not a doctor–or at least not one practicing at the time–but in fact an administrator who was there to keep an eye on the bottom line.

    Between her and the director of palliative care–they worked in tandem to push things toward discharging my mom–I would not have been surprised if they had put my mother on a gurney, shoved it out the door, and just let her roll down the street to wherever she came to rest. (At one point, in a meeting with me and my sister, they threatened to “bring in lawyers” if we didn’t get mom in a skilled nursing facility on their schedule.) They could not have cared less that mom was “actively dying,” as a representative from a local SNF characterized her. It was only through the intervention of that SNF rep that we were able to get mom placed in the local hospice home–where she died two days later.

    (And even after my mother was admitted to the hospice house, that ghoul who was the hospital’s director of palliative care, and was also the director of the hospice organization, was talking about kicking mom out to a SNF “if her condition improved.” Gosh, thank goodness she just up and died a day later, so that that witch was not inconvenienced any further.)

    It is appalling how a mortally sick person was treated at a hospital, which has long been considered the sort of place where comfort for the afflicted is the rule. Not so anymore–it’s all about economics. One of the evil pair even said as much to us: “that’s the way it is in this country,” she said.

    I don’t know if the bill mentioned in the piece above actually would directly address the question of whether or not hospital administrators actually do present themselves as practicing physicians when they’re not, but if not I would hope such an amendment could be added to the legislation. I don’t have proof, but I wouldn’t put it past these creatures to behave in such a manner. I don’t live in California anymore, but I do hope the bill becomes law, and that it can set an example of other states as well (if not the nation as a whole).

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