PeaceHealth drops plan to outsource Oregon ER physicians

After a tidal wave of blowback that culminated in a lawsuit, a nonprofit health system has reversed course in its plan to replace its Oregon emergency physicians with a national chain. 

PeaceHealth’s announcement Wednesday didn’t disclose what prompted its change of heart, but those familiar with the situation say it’s because the health system’s plan was poised for defeat in a legal challenge. When PeaceHealth said in February it was cutting ties with Eugene Emergency Physicians, the local group that had staffed its Oregon hospitals for 35 years, the news drew tremendous pushback from doctors, nurses, lawmakers, mayors, and emergency medicine groups. 

Then, on March 20, the Eugene emergency physicians sued, arguing that PeaceHealth’s plan to use the Atlanta-based staffing chain ApolloMD violated a new Oregon law prohibiting managed service organizations from directly owning medical practices or interfering with clinical decisions. The case has had four hearings, in which the judge was “quite clear” that the scheme violated the law, Senate Bill 951, said Hayden Rooke-Ley, an attorney who represented the doctors and a senior fellow for health care with the American Economic Liberties Project.