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If you've ever wondered whether physicians still have any power in modern healthcare, today's episode is for you. This isn't just a story about one emergency medicine group in Oregon; it's a story about hospital consolidation, corporate medicine, physician unity, and what can happen when doctors decide that they're not going to give up control of their profession. Make sure you stay tuned until the end of the podcast, because you're not going to want to miss the courtroom showdown when physicians went head to head against their would-be corporate overlords, and what the judge had to say that led the hospital back to the negotiating table and a successful outcome for these independent physicians and

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I'm Bianca Jacobs. I moved up here right out of residency. I joined the group because it was a Democratic group. Here's Dr. Dan McGee.

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I'm a partner in Eugene emergency physicians. I've been a partner for about 11 and a half years now, and I've lived in Eugene, Oregon, for 13 years. I went to University of Illinois for medical school, and also got a PhD in communications research and anthropology. When things take an activist turn, I find I fit in fairly well. I think that really comes out of anthropology and my background in doing social theory.

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Starting two years ago, in December of 2023 Peace House closed University District Hospital. We told them beforehand that there would be increased volumes at Riverbend, that it was not going to be safe. Why do you think Peace Health wanted to close University Hospital?

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There are a few factors that played a role. The facility was an old facility, and it didn't meet standards for hospital buildings, and it would have required a very, very substantial investment to bring it up to code cellular. It

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wasn't unreasonable that they decided to close that facility, but the problem was that you, as an ER group, if I understood you correctly, Bianca, you guys said this is going to be an issue because we're not going to be able to support the overflow

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that's part of it. The emergency department, in particular at University District, provided a very, very important community medical service that the city of Eugene relied heavily on. We saw 90 and 100 patients a day there. We also had a psychiatric area of the emergency department that had secure beds, it was a safe area for psychiatric patients, which River Bend did not have, and still doesn't have. And so, closing it created a number of problems. They made no preparations for that overflow. They did not expand the emergency department at Riverbend, and the other problem was the decreased number of inpatient beds, because you suddenly lost about 30 beds, and then it got even worse, because they took a whole floor of Riverbend Medical Center away, an entire inpatient war suddenly disappeared, so here you have the situation where these hospitals are situated in the great state of Oregon, which has the lowest number of inpatient beds per capita of any state in the United States, and you take away a large number of inpatient beds, and then you're cramming two EDs into the space of one ED. We tried to warn Peace Health about some of the consequences of this, and they would have none of it. They were hell-bent on closing this facility, and they did it with, without accepting any of our advice, essentially.

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So then fast forward to fall of 2025 We were told that our contracts were due to expire. We also staff a critical access hospital in Cottage Grove, which is about 30 miles south of the Eugene Springfield area. So Cottage Grove contract was set to end at the end of May, and River Bend's contract was set to end at the end of June. So they put up our contract for an RFP, and then announced february 4 that they awarded it to Apollo MD.

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Do you think that some of your advice and your discussions were part of why. Did they put out an RFP request for proposal to other groups for coverage?

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There was a general sense that when wait times in the emergency department went dramatically up after the closure of UD, when the amount of time that medics spent waiting patients to offload patients, who was accountable for that turned out we were being held directly accountable. I think there was a desire on the part of certain administrators to place the blame on us. Essentially, it was disturbing. We heavily engaged administration and trialed all sorts of processes, provider and triage rapid medical exam rooms, where you're moving patients in and out of the lobby and practicing lobby medicine, which is what we're still doing. Lots of hall beds, we had an area where they were vending machines, which became a treatment area. We had closets that became treatment areas, all sorts of things, and so we were doing everything we could to improve things, but in these moments of stress, you bring in a big corporate medical group that always has this shtick, right, and they come in and they say we got a team of process engineers, right,

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all these challenges that you, as seasoned emergency physicians, can't

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fix because you've been put into this horrible situation that you warned them about. So, Bianca, when you heard about this RFP, did you hear about this ahead of time, or did you only find out after they had granted the contract to Apollo? We were informed as an RFP, and as a group, we got letters of support from just about every specialty in the hospital to speak to the quality of physicians that we are and the relationships that we have with other groups. Frankly, we were a little bit shocked that the award was given to Apollo.

6:57
We thought either we were going to get it or Vituity, which has a footprint in Oregon, not a company that has no footprint in Oregon, and one of the reasons we felt that way was because of the new corporate practice of medicine laws in Oregon, Senate Bill 951 as it's still known, which prohibits out-of-state companies that are not owned by doctors in Oregon, from practicing in Oregon, you can't have a company owned out of state hire doctors in Oregon, and

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yet that's exactly what Apollo MD does, right?

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Yes, you know, a lot of states have these corporate practice of medicine laws that go way back in Oregon, they go back to 1947 but the staffing companies have devised a workaround that creates a loophole where they create a local company that makes it look like they're hiring the physicians, like a

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shell company, it's a

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shell company that's with a

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friendly physician, sometimes that's

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that's what it's called, the friendly physician model, and Senate Bill 951 is specifically oriented towards preventing that friendly physician model from working in the state of Oregon. Apollo MD fit that model perfectly, so I was a bit surprised that it was Apollo MD, and immediately thought, oh my gosh, they're in violation of the law.

8:25
Wow. So, what was your next step?

8:28
First of all, we all talked to each other, and we put out feelers. Who's willing to work for this company? We had a meeting, and it turned out nobody.

8:38
You're a democratically owned group, which means that you own yourselves, you've been in existence for 35 years, you're known in the community, you're rooted in the community. Peace Health decides, yeah, well, we're still going to hire this other company, potentially breaking the law. So you hear this, and then Apollo MD says, we're now going to take over this contract, and we would like to hire you to come and work for us. Forget about owning yourself anymore. You can just work for us.

9:05
Initially, they didn't come to us as a group. They kind of tried to pick off people individually, like one of our PAs got random text message from one of his professors from PA school that he hadn't talked to in gosh knows how many years, and I think that rubbed people the wrong way. I think we all know how this group operates. It's not a secret, and none of us wanted to work for that kind of model. They said, "Well, you'll be a 1099 employee, which offers no employer protections. The only benefit that they would pay as malpractice, and that was pretty concerning to all of us as well. Like, okay, so we have to pay health insurance and disability and all of these other things, and then you're gonna give us this mediocre rate. Well,

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how else could they underbid your company and offer to do it for less than the. Money, if they're not going to somehow end up paying the people doing the work less money, they have

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to pay these process engineers and wing facilitator workers from where's that

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money going to come from?

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It's unclear, because they never showed us the contract, but we actually think that they failed to under bid us, which put Peace Health in this position where they couldn't even say, "Oh, this is a simple business decision. We gave this to the low bidder. Sorry guys, they were really having a hard time explaining it. So we took a vote, and we said, "Look, anybody who doesn't want to work for Apollo MD, would you be willing to sign a document saying, 'Hey, I will not even talk to Apollo MD for 90 days after that contract begins. Let's see if people are willing to go that far, and 100% of people signed it, and that's when battle lines were really drawn, and then things really escalated, because the entire medical staff, over 450 doctors, were outraged

11:17
when they made the announcement. All of the medical staff members at the hospital were outraged. I mean, they had all written us letters of support, and overall we have very good working relationships with everyone. It's a small community, it's a pretty tight medical community. So, there was this outrage, and there were meetings held to kind of ask questions and make recommendations for not switching to Apollo. It was very heated. A lot of physicians that spoke on behalf of the relationships that we have, knowing when we call them that they can trust our judgment. Many physicians were concerned about increased calls that they would get, because you don't know the quality of people

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the medical staff asked point blank in the meeting questions about who was involved in this decision, and not only did they not consult any other medical staff about this decision, which it turns out is in violation of our medical staff bylaws. They went against the advice of the medical staff, because the medical staff, all the different departments, had sent us letters of support. The medical staff, right then and there, decided to take a vote of no confidence. They voted 93% vote of no confidence and a vote of 99% to reinstate EEP, and that was

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the highest participation of medical staff members who voted in any election, that was higher than any election participation.

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Then a week later, the nurses had a similar vote, and they voted 99% vote of no confidence against them, and so then that's when we went into high gear, meeting legislators, the mayors of Springfield and Eugene, city councilmen, state legislators, the governor, and we went on a media campaign.

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Now you would have thought that Peace Health, having heard those concerns from their medical staff, would have taken action right then and there and not required you to go to those efforts.

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After getting this vote of no confidence, we thought, okay, maybe they're going to do something, and the response was that the administrators would have deep internal reflection, so deep internal reflection was the consequence of having a 94% vote of no confidence.

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That's when you said, okay, let's take our next step and see if we can put pressure on them politically and through the media, get patients to hear about this, and so what was the response then from political outreach?

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Nothing really happened. A lot of people wrote to higher level administrators within Peace Health, to PeaceHealth board members, legislators, and as governor were all extremely supportive, and that they reached out to Peace Health's higher administration as well. There was no response from that. It turned out that Peace Hell's higher-ups just sent all those letters right back, and there was no response from the legislative point of view. This was brought up on the Senate floor of the Oregon State Legislative Leger and brought up on the house floor, they went to the Oregon Hospital Authority as well, and nothing happened. One reason is there was no mechanism of enforcement of the law. They took out mechanisms of enforcement because it was going to cost money, and the expense was going to hold up the bill. When it went to past, and so they, there was no mechanism of enforcement. We were hoping that we could get the Oregon Justice Department involved, but they had no jurisdiction over this, and it took

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us a while to figure this out. We worked in a very stepwise progression. We talked to local legislators, we went to the Capitol, then to a bunch of different agencies. We kept asking, can this person enforce the law? Can that person enforce law? Can the Attorney General enforce law?

15:32
We had a very professionalized media campaign, and we had a legislative team, a judicial team, we had people involved in fundraisers. It was pretty intense. There were a lot of us doing a lot of things, and people stepping up and taking action, and not hesitating. Another

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full-time job,

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things had become so stressful and intense at this point, because we were literally running out of time, because everybody, literally everybody, was getting job offers, including myself. Everybody was having to look for other jobs, and thinking about, well, can I get credentialed in time at a new job to be able to start working, or am I going to be out of work for a few months?

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Yeah, let's just take a moment to remind our audience that we're in a quote physician shortage, and that goes for ER in every specialty. So, while these hospitals are kind of playing games in a respect, you're being recruited by other hospitals and organizations that would love to hire you, but you want to stay in your community, where you are rooted and where you've worked for many years.

16:46
Yes, I mean, literally, the day after this hit the media about the RFP, my phone started ringing, and, and I started getting offers for interviews. Peace Health, they had told the media that, that, oh, at least 80% of them are going to stay put. That's what they told people, not

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read the room.

17:09
They did not read the room, they, and nobody ever asked us what we wanted to do. They just sort of said, we're the suits, we're going to make the decision.

17:16
Isn't that always the way? It would be so amazing for them to say maybe we can actually work together with our physicians to make sure that things are going the right way.

17:27
It became clear that Peace Health wasn't backing down, Apollo MD wasn't backing down, even though none of us wanted to stay with them, and even though they had not recruited physicians, they had recruited essentially nobody. They were just going to go with a bunch of locums and try to stay with this plan, so it was clear that the only way P could survive was going to be through the courts, and not only did we have to take them to court, we were going to have to get a preliminary injunction to stop this deal, and it had to happen really fast, and so we put together a legal team, and we put together a request for preliminary injunction. We

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did it really quickly.

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This all happened simultaneously. We met with probably three different legal companies, and we're vetting lawyers. We got some assistance with some friends of ours on the medical staff, also, who knew a lot about the law. We also got help from Hayden Rook Lay, who actually helped write Senate Bill 951 and he actually produced a general legal strategy for us that became a template for us to work with. He had a partner, Brendan Ballou, who's a Washington, DC lawyer and former US Justice Department lawyer, but we needed a litigator. These guys aren't local litigators, so we ended up teaming up with Hunter and Hershel, was the legal firm, and we hired Hayden Rooklay and Brandon Bellew as well. So we had a team of four lawyers, one of whom was in DC, and the other three were in Oregon. We put together a very robust and aggressive request for a preliminary injunction that addressed every specific way in which Apollo MD was in violation of the law. We had to have hearings, and the hearings were very dramatic, very dramatic,

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meaning emotional testimony, meaning what in what way,

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emotional testimony, twists and turns, threats. It was, it was riveting. So I was a named plaintiff in the case, the. Way we organized the case was that we had three plaintiffs, it was EEP, me, and an eight year old girl who's a type one diabetic, who was going to be damaged if Apollo MD won because of her loss of quality care. On the first day, we had the girl's mother testified, we had some nurses testify that they had concerns for the loss of physicians and the decreased quality of care, and then I testified at that point I was a bit concerned that we needed to refocus attention to the specifics of the law itself, and so when I took the stand I said a lot of negative things about corporate medical groups because I had worked for them. I said I had worked for three different groups like that, and I said, you know, hey, strike three, you're out, man. I'm not going to work for another company like this. Then I had told them that I had reached out to a friend who had worked for Apollo MD, who said it was the worst job I've ever worked in my entire life. And I said that on the stand. They asked me, you keep saying the word hour when we were talking about the hospital. Do you own this hospital? Do you think you have a right to work there? And I said no. This is a community resource. I could see a look of anger on the lawyers on the other team. And keep in mind, we have three lawyers up there in the courtroom, and they've got 12. It's like the Davids versus the Goliaths between the two defendants, Peace Health and Apollo MD. They have a team of 12 lawyers

21:30
from large national firms.

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They had this like media guy with all these cables and stuff, and then we've got our lawyers sitting at their desks, right?

21:40
So you were probably a little scared because you saw those looks and you knew they were going to attack you.

21:45
Oh yeah, they did

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attack you

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yet. And so what? Pretty

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hard.

21:50
I went home and I told my wife, Gretchen. I said, Gretchen, I felt like I was scoring some real points against them, and they did not look happy when we left the court, and I was going to have to come back and get cross-examined some more the next morning, on Tuesday, and I said they're going to do one of two things: they're going to either say no more, no, no more questions from Dr. McGee, and get me off and chase me off the stand, so I don't get to speak anymore, or they're going to attack me personally, and they chose the latter, and it did not go well

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for them.

22:28
Yeah, it didn't go well for them. We came in the next day, and they probably made the worst mistake they could possibly make. They let me speak a lot, and so I had a whole list of things I wanted to say, a whole laundry list of things I wanted to say about corporate medicine, about the, you know, the value of independent democratic groups. I said that the Democratic groups were the gold standard of medical care in the United States, and that corporate medicine can't even compete with us in terms of quality of care, I said a lot of things, and they just sort of let me have at it, which was just great, but then they started getting weird, and they started asking about things I had said on Facebook. I had made statements that anybody who would take a locums job for Apollo MD and come here was essentially a scab, and they wanted to know, how could I say that? What did I mean by scab? So I defined scab. I explained what a scab was. I explained how these locums, doctors who would work for a company engaged in a hostile takeover scabs. There's nothing wrong with doing locums work. I've done locum worse work myself. Just don't do it during a hostile takeover, because you basically, you're being a scab. So, I said these things, and I explained at some length. And then they said, why didn't you explain this on Facebook? I said, well, I wasn't writing a dissertation, it was a Facebook post, so then they said, "Well, if you, if you lose this case, are you going to go and apologize for making these various statements against Apollo MD? And all of a sudden the judge stood up and he said, "Wait a second, I don't see where that, where any of this is relevant. What are you doing here? Are you gathering information from Dr. McGee, so that you can mount a separate legal suit to get punitive damages against Dr. McGee and the Apollo MD lawyers were sort of hemming and hawing, and one of the Peace Health lawyers stood up and said, "Yes, your honor, and there was this moment of silence in the courtroom, and Judge Kasub. I said we're going to stop this, this, this line of questioning immediately. This is not relevant to this case. And then we went on recess, and when we came back, Judge looked even angrier, and he said, I will not have my court be host to parasites, that's what he said, and it was a stunning moment, and he told me to take the, to take my seat, and that there was going to be no more questioning of me at that moment. Things really had turned, and they just got worse and worse for Apollo MD and Peace Health, yeah, the defense called their star witnesses up from Apollo MD and Lane Emergency Physicians, their shell company. Both of them proceeded to get up there and basically deny knowledge about their own companies, even though they were the leaders of these companies, the CEO of Apollo MD was not answering all the questions in a straightforward manner. He basically kept saying, "I'll refer to my counsel to answer this question. They weren't producing information; they have a very Byzantine corporate structure, and they were essentially deflecting questions to reveal the nature of the corporation, and it angered the judge so much, so that that Judge Kasubi essentially told them both that they were lying on the stand. He said they were not being honest on the stand, and he essentially told them they were engaging in perjury, and so things did not go well for Apollo MD. And then when Peace Health took the stand a couple days later, they could not effectively address any of the legal issues at hand, and tried instead to try to make the RFP process look like it was fair. Then, on cross-examination, our attorneys just punched holes in the RFP process and showed that it wasn't fair. For instance, one of the categories we were being judged on, we got zero points for not having a process for hiring locums when Eugene emergency physicians in 35 years has never had to use a locum. We didn't have never used a locums physician. It didn't even make sense to us.

27:32
Paul OMD was scored a point for having business in Oregon. I think the person who gave them a point for already doing business in Oregon said, "Oh, they have a contract in Ketchikan, and our lawyer said, "That's not an oregonis. "Oh, that's my bad, I'm not from here. He's been here for a couple years, and you know there's Google.

27:53
Yeah,

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wow.

27:54
So it was real bad, and so after all that testimony, Peace Health reached out to us and started having talks, and those talks ended up in Eugene emergency physicians being able to negotiate a contract with PeaceHealth. The case did not come to fruition. It did not end because it was ended by us coming up with a mutual agreement and ended up being able to negotiate a really excellent contract, and Apollo MD went away.

28:28
Congratulations, and that's actually always better when it doesn't have to go to court, or when it doesn't have to continue, because it's expensive. Were you able to get some compensation for the expense that you went through to litigate,

28:42
no, because it wasn't. It didn't go to full trial. It was only an injunction, and you can't get legal expenses back with an injunction. The

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American Academy of Emergency Medicine stood by the group throughout the entire endeavor, including paying for half of their legal expenses.

28:59
We'll

29:00
put a huge plug for AAM, and let's put a call out to every other medical society and organization listening. This is how you support your physicians, this is how you grow your organizations, is you go to bat for them, you help them, and then hopefully we return the favor by supporting that organization.

29:19
Yeah, so anybody out there who's listening to this, who might find themselves in a similar situation. For emergency physicians, reach out to AAEM. The expert advice that we received from Bob McNamara was equally valuable to the money. They have expertise, they can help you with legal advice, as well as helping to fund a legal fight, if you get in one like this,

29:43
for people listening, fighting to implement and pass a law like SB 951 going forward is huge. I think that gave us a legal foothold to stand on.

29:57
What Bianca is suggesting is. Don't wait until your contract is directly threatened. Take our laws in Oregon and use them as a template for your own state, and start lobbying your state legislators to put laws in place that eliminate the loopholes that allow for the friendly physician model, and do that immediately, and then if you do get threatened by takeover, then find out ways to fight against it. First and foremost, refuse to work for the incoming company. Chances are that they won't even be capable of replacing

30:41
one thing kind of to that point that I kept reminding myself is that these companies use locums, the job is going to be there, you know, if I don't work for them for 90 days, the job will still be there afterwards, and, like you mentioned, Rebecca, there's a physician shortage, there's other jobs in the area, and I know everyone has different life circumstances, some people can't really afford this three months, some people don't want to travel for work, but thinking about it in that framework, like there are jobs, there are ways that I can make money temporarily until I get things sorted out. That was really important for me to remember. That's a really good point, and you know, locums, it's kind of a double-edged sword for

31:30
the Apollos, because they have to pay a lot more for locums physicians. But meanwhile, you, if you're taking a locums job, especially if you're traveling, you're probably gonna get paid a higher rate, as well. The whole thing just doesn't make sense. It's just seems to be about power and control, and the fact that they are used to physicians just kind of giving in and not working together, because traditionally we've struggled with that. So, that I think this is such an important example of the fact that we don't have to roll over, the fact that we can come together, that we can be creative. We don't have to just take the jobs that we're given, we can actually create our own path.

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You have to stay involved, and so I urge everybody to get involved in their own states to strengthen their laws. And if you have any questions, always feel free to reach out to us. Bianca and I would be happy to help.

32:22
Thanks so much for listening to this episode of Physicians Taking Back Medicine, a podcast sponsored by Medical Economics. I'm your host, Dr. Rebecca Bernard, bringing you true stories of day-to-day physicians just like you, who are fighting to improve our healthcare system. Thanks again, and we'll see you on the next episode.

32:44
Bye.

Transcribed by https://otter.ai