Commercial Limits

VII. Key Issues: Regulation & Reform >> B. Health Care Regulation >> Health Professionals Regulation >> Commercial Limits (last updated June 15, 2014)

Overview

Commercialism in medicine often has been viewed with suspicion due to fears that financial incentives might interfere with what was in a patient’s best interests; they typically are rationalized as necessary to protect public health, safety and welfare. Public choice proponents would note that such laws historically also were motivated by concerns over competition from HMOs, and indeed inhibited their development, but the HMO Act of 1973 preempted all statutes that served as a barrier to formation of federally qualified HMOs.

Corporate practice statutes take a variety of forms; they may prohibit non-physicians from owning businesses in which physicians treat patients, place restrictions on business relationships between physicians and non-professional corporations or unlicensed individuals, restrict the number of branch offices that a professional may operate, prohibit practices from being located in commercial establishments (e.g., department stores) or ban medical practice under a trade name. Advertising restrictions may arise in a variety of forms, including state statutes, regulations governing “commercial practice” issued by state licensure boards, attorney general opinions or court decisions. The Duke Center for Health Policy and Inequalities Research has developed a draft working paper assessing the costs and benefits of commercial limits on health professionals, including corporate practice of medicine and advertising restrictions imposed by the FTC and state regulators (P7-Commercial Limits).

Links

• Dollars for Docs (ProPublica). Drug companies have long kept secret details of the payments they make to doctors and other health professionals for promoting their drugs. But 15 companies have begun publishing the information, some because of legal settlements. Use this tool to search for payments.