A lawsuit filed by Eugene, Ore.-based Emergency Physicians against PeaceHealth and Atlanta-based staffing company ApolloMD has put a spotlight on long-standing tensions between corporate medicine and local physician control — and it may set a national precedent.
What happened with PeaceHealth?
In February 2026, PeaceHealth said it would not renew its contract with Eugene Emergency Physicians, the group that had staffed Lane County emergency departments since 1991. Following a proposal process, PeaceHealth selected ApolloMD to take over staffing at three Oregon EDs beginning in June or July 2026. EEP’s clinicians were offered the opportunity to reapply for positions under ApolloMD’s newly formed entity, Lane Emergency Physicians, but all 41 declined, pledging not to join for at least 90 days. Medical staff at all three hospitals responded by issuing a vote of no confidence in PeaceHealth leadership and voting to restore EEP as the ED provider group.
On March 20, EEP filed a lawsuit in Oregon state circuit court seeking to block the transition. The suit claims the PeaceHealth-ApolloMD arrangement violates Oregon Senate Bill 951. EEP alleged that while Lane Emergency Physicians holds the staffing contract and is nominally physician-owned, ApolloMD retains significant control over staffing, hiring and other operations. ApolloMD countered that Lane EP is a physician-owned entity responsible for all clinical decisions and that ApolloMD provides only nonclinical administrative support in full compliance with SB 951.
In a significant reversal, PeaceHealth on May 6 ultimately announced plans to renew its contract with EEP, offering a two- to three-year agreement at its Cottage Grove and RiverBend locations, according to PeaceHealth spokesperson Joe Waltasti. PeaceHealth will continue direct employment at its Florence emergency department, as it has in previous years. The reversal came as the ApolloMD transition was nearing its start, with a July 1 date set for RiverBend and June 1 for Cottage Grove and Florence. According to a May 6 PeaceHealth news release shared with Becker’s, the system and EEP have “reengaged in constructive discussions and are working jointly to define a path forward that best supports high-quality, reliable care for patients across Lane County.”
“Our shared responsibility is clear: to ensure a well-staffed emergency department that delivers safe, reliable care for every patient,” Heather Wall, RN, interim chief executive of PeaceHealth’s Oregon region, told Becker’s. “That remains unchanged, and we will take the steps necessary to meet that responsibility.”
Corporate practice of medicine landscape
At the heart of the lawsuit was Oregon Senate Bill 951 — a 2025 law that sets some of the nation’s strictest limits on corporate control of medical practices, including restrictions on management services organizations. The EEP case marked the first legal test of SB 951 since it was signed in June 2025. The law limits the control companies can exert over a clinic’s operations and bans noncompete agreements that prevent physicians from joining a different practice.
The legislation came on the heels of numerous closures, physician departures and patient care issues at corporate-owned practices across Oregon. SB 951 was designed to prohibit “friendly physician” arrangements, meaning structures in which a nominally physician-owned entity is functionally controlled by an outside corporate group.
“What we tried to do in Oregon is be clear that the corporate practice of medicine doctrine means something,” House Majority Leader Ben Bowman told the American Medical Association. “It doesn’t mean you can’t partner with private equity firms or corporations, but it means that when decisions are being made that impact patients, they have to be made by physicians.”
With the EEP lawsuit serving as SB 951’s first test case, the outcome carries national significance. Numerous states have proposed similar legislation in recent months, and the legal and regulatory framework around MSOs in emergency medicine is likely to keep evolving. In 2025 alone, 37 state bills related to consolidation and competition were enacted.
The broader numbers underscore the shift. Corporate entities, including insurers and private equity firms, employed 23% of physicians in 2024, up from 15% in 2019, according to a Government Accountability Office report. Private equity-owned practices now account for 6.5% of physicians and control more than 30% of physicians in specialties such as gastroenterology, dermatology and ophthalmology.
A consolidating workforce
The dispute between PeaceHealth and EEP arrived amid accelerating consolidation in emergency medicine. A study published in Annals of Emergency Medicine, which examined 3,998 hospital-based EDs accounting for 109.7 million visits, found that health system-owned groups staffed 33% of all emergency visits, and nearly 1 in 4 visits were staffed by physicians in private equity-owned groups. Fewer than half of emergency visits are now staffed by majority physician-owned employers.
Between 2019 and 2023, the share of independent physician practices owned by hospitals, health systems or other corporate entities jumped from 39% to 59%. Over the same period, physician employment by these entities rose from 62% to 78%, according to a December 2025 report from the Progressive Policy Institute.
For many physicians, the cost of consolidation runs deeper than statistics. Robert McNamara, MD, professor and chair of emergency medicine at Philadelphia-based Temple University’s Lewis Katz School of Medicine, told Emergency Medicine News that physicians employed by large corporate groups as independent contractors often lack due process protections. When corporate groups control a contract, he said, physicians may be reluctant to raise safety or quality concerns for fear of termination.
Other physicians agree with the sense of professional erosion.
“The main reason the physicians are increasingly dissatisfied with their career in medicine is the feeling of lack of control over their work and ability to take care of their patients,” Vladimir Sinkov, MD, founder and CEO of Las Vegas-based Sinkov Spine Center, told Becker’s. “Once they become employees, a significant amount of clinical and career autonomy is lost. The initial increases in salary eventually become diluted by ever-increasing ‘production’ requirements, and physicians then feel trapped in a job they do not like but can no longer leave (don’t forget the noncompete clause).”
The physician staffing landscape
The conflict reflects a decades-long shift in how emergency medicine is staffed. When the specialty was formally organized in 1968, its founding principles emphasized physician collaboration and independence from commercial interests, according to Emergency Medicine News. Over time, physician entrepreneurs formed staffing companies, opening the door to private equity investment and corporate ownership. Today, large multistate organizations contract with hospitals across the country. Critics say this franchise model prioritizes contract acquisition and revenue optimization over community-rooted care.
That model is now showing cracks. Three major physician staffing firms have either shut down or filed for bankruptcy since 2022. As financial pressures mount, hospitals and healthcare facilities have begun shifting away from staffing firms altogether, opting instead to directly hire physicians or rely on gig-style models using travel nurses and contract workers.
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