Senate Bill 5,387, which would codify restrictions on corporate ownership and management of medical practices, drew hours of testimony on Feb. 7 before the Washington State Senate Health & Long Term Care Committee. The bill’s prime sponsor, Senator June Robinson, told the committee the measure is designed to “safeguard patient care by upholding the corporate practice and medicine laws” and to limit private equity influence on clinical decisions.

The bill would make it unlawful, except through recognized professional entities such as professional LLCs and professional service corporations, for entities without a license to practice medicine to own a medical practice, employ licensed health care providers, or “otherwise engage in the practice of medicine,” and would require licensed providers to be majority owners and to exert “meaningful control.” Committee staff described additional language that would bar non‑licensed individuals from directing or otherwise interfering with a licensed provider’s professional judgment.

Supporters emphasized risks they say stem from commercialization and private equity. Jane Beyer of the Office of the Insurance Commissioner summarized national and state acquisition trends, saying private equity deals in health care rose from 75 in 2012 to 484 in 2021 and that Washington saw four private equity acquisitions in 2014 and 97 in 2023. “We think that this bill keeps private equity firms and management services organizations…out of the clinical decisions that are made,” Beyer said.

Several practicing physicians and clinical leaders testified in favor, citing patient safety and clinician autonomy. Dr. Deborah Glasser, a retired primary care physician, said corporate control redirects care “toward efficiency and profitability for the business rather than for the patient.” Sam Hatzenbieler of the Economic Opportunity Institute told the committee private equity ownership is “almost completely unregulated” and linked it to higher costs and poorer outcomes in some studies.

Opponents and stakeholders urged narrower language and exceptions to avoid disrupting existing care arrangements and access. Representatives of telehealth and specialty practices — including the American Telemedicine Association and fertility and dermatology clinics — said the bill’s in‑state ownership and broad restrictions on management services organizations (MSOs) could force telehealth companies to stop serving Washington patients, jeopardize access to specialized services such as fertility care, and make it harder for independent practices to afford expensive equipment or expand Medicaid access.

Radiology and outpatient imaging operators described practical dependencies on outside capital to buy and operate multi‑million dollar scanners and to staff imaging centers. Jared Durkee, a radiologist, told the committee that modern imaging “is beyond the financial capacity of a few physicians to buy and run,” warning that prohibiting common MSO partnerships could put 14 imaging centers serving about 160,000 Washington patients at risk.

Hospital representatives and hospitalist physicians also raised concerns about portions of the bill that they said would intrude on interdisciplinary team functions and the widely used employment structures in hospital systems. Chris Knapp, deputy general counsel for MultiCare Health System, argued the hospital exemption in the bill does not match existing ownership and employment arrangements and could leave many hospitals and their physician staff in unclear legal territory.

Multiple witnesses, including the Washington State Medical Association, Washington State Hospital Association and independent physician groups, urged the committee to refine the draft. WSMA noted broad support for the bill’s goal—preserving clinical autonomy—but warned that enforcement language could place liability on individual physicians for organizational practices. Several physician witnesses asked for clearer definitions of the prohibited conduct (for example, what constitutes “interference” in clinical decision making) and requested safe harbors for routine administrative relationships with MSOs that do not, in practice, affect clinical care.

Committee staff and the sponsor acknowledged the concerns and said they were open to amendments. Senator Robinson said she would consider clarifications to prevent unintended disruptions to patient access while preserving the bill’s protections. The committee did not vote on the bill during the hearing.

Ending: The hearing generated detailed competing views: proponents seeking stronger statutory safeguards against corporate influence on clinical care, and representatives of providers, hospitals and industry warning of unintended consequences for access and capacity. Committee staff and the sponsor signaled they would work with stakeholders on amendments before any further action.