Protections and Accountability Standards for Primary Care Organizations
After completing Rethinking Primary Care Investment Strategy, it became clear that state-level executives could benefit from a framework to help them organize “a multi-year planning, development, and implementation effort involving numerous public and private sector stakeholders, including payers, providers, employers and NGOs,” as described in Lever 1: Authorizations, Goals and Objectives. The result is nine key levers depicted in the diagram below. This is the third article in the series, following Lever 1 and Lever 2: Needs Assessment & Resource Allocation. This article addresses Lever 3 i.e. the rules and structures that states need to ensure that primary care investment produces durable, mission-aligned results.
Key Points
Consolidation has reshaped who controls primary care in most states. Hospital systems, investor-backed organizations, payer-owned models, and out-of-state corporations now own practices that were once independent, and their priorities are not always aligned with what states expect primary care to accomplish. Governance rules that define acceptable ownership, require clinician control, and condition funding on accountability are prerequisites of a primary care investment strategy intended to revitalize primary care to meet the health needs of the state’s population.
- Governance must address ownership and control. Primary care investment will not achieve its intended results if new funds flow into organizations whose ownership, incentives, or operating priorities are misaligned with the primary care mission.
- States should establish enforceable ownership rules before transactions arise. Those rules should define which buyers, conditions, and ownership structures are acceptable for primary care practices before financial distress or acquisition offers force case-by-case decisions.
- Rules of governance for primary care organizations should require control by primary care clinicians and adequate patient/consumer representation. Funding should be conditioned on meeting those standards and demonstrating continuous improvement over time.
This article also reviews recent state legislation and regulatory activity that may help planners identify practical options for ownership and control safeguards. These examples are not a model statute, but a starting point for state-specific design.
Consolidation Has Reshaped Primary Care
Over the past two decades, consolidation has changed who controls primary care in most states. Independent practices have been acquired by hospital systems, investor-backed groups, payer-owned models, and out-of-state corporations. Each type of owner may bring objectives that differ from what states expect primary care to accomplish as a result of increased investment: accessible, preventive, continuous, patient-centered, community-accountable care.
Ownership matters because it affects control. The owner, parent organization, or management entity may influence staffing, referral patterns, clinical priorities, data reporting, contracting, reinvestment, and the use of funds intended to strengthen primary care. A practice can appear to expand on paper, with more employed physicians, more locations, and more attributed patients, while becoming less rooted in community needs and less able to act in patients’ long-term interests.
Hospital ownership illustrates the issue. Hospital systems can provide capital, infrastructure, contracting capacity, and administrative support. But hospital ownership can also create structural tension when the financial model of the parent organization depends on facility-based services, specialist referrals, imaging, procedures, and admissions. A primary care practice that succeeds in reducing avoidable hospital use may be advancing the state’s public goals while weakening an important revenue stream for its owner.
States preparing to channel substantially more resources into primary care should not assume that existing ownership structures will automatically produce better population health. One objective of primary care investment should be to expand the number and scale of primary care organizations that can function as durable, high-performing, community-based providers. High-functioning primary care should include access, continuity, prevention, chronic care management, team-based practice, behavioral health integration, data reporting, risk management, and continuous quality improvement.
Governance Objectives
The central governance responsibility is to establish rules and operating arrangements before market transactions force decisions under pressure. Waiting until a deal is on the table leaves the state negotiating with parties that already have capital at risk and expect approval. States should answer the core ownership questions in advance.
For out-of-state and for-profit ownership, the state should decide what conditions are necessary to preserve local accountability, access, equity, and mission alignment. For private equity ownership, the state should decide whether partial or complete ownership is acceptable and what restrictions are needed to protect clinical independence, staffing, reinvestment, and long-term continuity. For payer ownership, the state should define guardrails for situations in which the same entity influences both payment and care delivery. For hospital ownership, the state should decide what conditions are required to preserve prevention, population health, and appropriate independence from downstream revenue incentives.
Effective governance should accomplish four things:
- Define high-functioning primary care in measurable terms. The purpose is not simply to spend more money on primary care, but to build organizations with the capacity, autonomy, workforce, infrastructure, payment models, and incentives to deliver better care and improve outcomes over time, with explicit standards against which progress can be assessed.
- Give stakeholders meaningful roles tied to actual decisions. Participation should not be symbolic. Providers, payers, employers, community representatives, patients, and state agencies should help shape priorities, implementation plans, financing mechanisms, and performance expectations, with defined authority, not just advisory status.
- Protect primary care organizations from ownership or control arrangements that undermine their mission. That requires explicit standards for who may own or control primary care organizations, under what conditions, and with what safeguards, established before transactions arise.
- Create policy coherence across state agencies and programs. Primary care sits at the intersection of Medicaid, workforce development, insurance regulation, health information technology, quality oversight, data analytics, market review, and state budgeting. Without designated leadership across these domains, even well-funded strategies will produce disconnected initiatives.
State Legislative Activity
State legislative activity on healthcare ownership is increasing, but unevenly. The most active area is private equity. High-profile health system bankruptcies, including Steward Health Care, have increased attention to transaction review, financial transparency, and investor control. At least 15 states have enacted some form of healthcare transaction review law, and more than two dozen bills were proposed across 13 states in 2025.
Several examples illustrate the direction of state activity. Oregon enacted SB 951, which strengthens its corporate practice of medicine doctrine and restricts the “friendly physician” model, in which a physician nominally owns a practice while a corporate entity controls operations. California enacted laws barring private equity from interfering with clinical decision-making and expanding state review of investor-driven healthcare transactions. Maine imposed a moratorium on private equity and real estate investment trust purchases of hospitals. Massachusetts joined Indiana as one of the few states with explicit reporting requirements for private equity healthcare transactions.
Private equity has attracted the most legislative attention, but it is not the only ownership issue. Hospital system ownership of primary care remains largely unaddressed in state law. Roughly 30 states have corporate practice of medicine statutes that limit non-physician ownership of medical practices, but many include exemptions for nonprofit hospitals, health systems, and HMOs as permissible physician employers.
The corporate practice of medicine doctrine is useful because it recognizes that clinical decisions should not be controlled by non-clinical financial interests. But the doctrine is uneven, often weakly enforced, and incomplete. In many states, its hospital exemptions leave the most common form of primary care consolidation outside the strongest ownership protections.
Vermont’s proposed H.583 illustrates one possible direction. It would codify corporate practice protections, set parameters for hospital-practice arrangements, prohibit straw ownership structures, and require genuine physician control of affiliated management entities.
The current state landscape can be summarized as follows:
| Ownership Type | Level of State Activity | Leading Examples/Status |
| Private equity | High | Maine moratorium, Oregon SB 951, California SB 351 and AB 1415, expanding transaction review laws |
| Corporate or for-profit ownership | Moderate | CPOM statutes in roughly 30 states, uneven enforcement, no general for-profit prohibition |
| Hospital system ownership | Very low | Broad hospital exemptions remain the central gap |
| Payer ownership | Very low | Addressed indirectly through antitrust and market oversight |
| Out-of-state ownership | Very low | Usually covered only incidentally through transaction review |
No single statute provides the answer. States are beginning to develop tools, but the tools remain incomplete. Most activity is focused on private equity, while payer ownership, out-of-state ownership, and hospital system control remain less developed areas of policy.
Stakeholder Participation
Ownership rules alone will not resolve every tension in primary care. States also need stakeholder participation that is balanced, structured, and durable.
Balanced representation matters. Governance forums that default to large health systems, major payers, and regulators will systematically underrepresent the clinical and patient perspectives that primary care investment is meant to serve.
Representation without authority is theater. States should condition eligibility for primary care funding, both ongoing payer support and infrastructure investment, on meeting defined governance standards, including clinician leadership and meaningful patient and consumer representation, with reporting requirements to verify compliance.
Structured representation where feasible. Advisory bodies and stakeholder forums should include patient advocates and consumer representatives. The limitation is real and should be acknowledged candidly: participation in formal governance tends to favor organized interests with dedicated policy staff, large payers, hospital systems, and advocacy groups whose institutional priorities do not always reflect the population primary care is intended to serve. Structured representation is essential, but it must be paired with accountability based on objective, measurable data as discussed below.
Population-level data as the durable accountability mechanism. A more reliable form of patient accountability is constant, public reporting on whether the intended population is actually being reached. States should maintain standing measures, the share of residents with a usual source of primary care, rates of unmet need and delayed care, avoidable emergency department visits and preventable hospitalizations, and disparities in access across income, race, geography, and insurance status, and treat these not as periodic assessments but as ongoing indicators of whether the primary care investment strategy is working. No stakeholder at the table can substitute for this kind of evidence, and no single interest can dominate or suppress it.
Wrap-Up
The central question in Lever 3 is whether the state has created a durable framework of leadership, participation, and ownership rules that protects the primary care mission and enables high-functioning organizations to thrive. Without that framework, even significant new investment in primary care may be captured by entities with different priorities, and the money will flow without the transformation.
Primary care governance should protect new and existing primary care organizations from ownership arrangements that weaken clinical autonomy, local accountability, and the primary care mission. State legislation, regulations, and other legal protections should provide the clarity needed to guide policy and regulatory decisions before transactions arise.
Recommendations include:
- Set ownership rules before transactions arise. States should define which buyers, conditions, and ownership structures are acceptable before financial distress or acquisition offers force case-by-case decisions.
- Limit adverse ownership effects. Governance rules should reduce the risks of consolidation, mission drift, and loss of local accountability, while creating room for new or expanding primary care organizations to thrive.
- Keep patients, communities, and primary care providers at the center. Governance decisions should give priority to the people primary care is intended to serve and to the clinicians and organizations responsible for delivering it. Clinician governance of primary care organizations should be a condition of funding, as should objective reporting on how well those organizations serve the community.
- Consider a primary care clinician bill of rights: a legally binding statement of the protections and obligations that together enable clinicians to practice at the highest and best use of their licenses. Key Lever 5, Provider Organization and Governance, will address this in greater detail.
States need durable authority to review ownership transactions, align public investment with public purposes, assign agency responsibility, secure payer participation where feasible, and protect clinician-led and community-governed primary care models across changes in administration.
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