The Paper Owner: A Brief History on The Corporate Practice of Medicine
California just published the anatomy of an illegal “friendly PC.” The Carbon Health settlement is the a clear map of where the corporate practice of medicine line is now drawn.
This piece has a companion I have not tried before: an interactive scrollable world, and a playable game. You sit at the desk of a physician recruited to be the paper owner of a venture-backed clinic chain. Contracts arrive, zany characters make offers, and you sign, redline, or refuse. One path ends in an orange jumpsuit, one in a consent decree with your name on the fine, and one in an independent practice that survives. Check it out, let me know if you’d like to see more innovative interactive pieces, I’ll have a write up soon on how I make these creative assets with Claude Code and Higgsfield MCP. Enjoy the article!
A Dive into the Corporate Practice of Medicine
Every founder, investor, and physician-owner building on a PC-MSO structure should study the fallout of the Carbon Health settlement.
The headline number in the Carbon Health settlement is $4.4 million. Eren Bali, the co-founder and former CEO, was fined $100,000 personally for the way his company’s contracts were written.1 California has policed the corporate practice of medicine for nearly a century. It has rarely reached past the corporate entity to bill the founder. On June 26, it did, and every CEO running a management services organization over a physician-owned practice should treat that as the actual news.
First, the caveat that most of the coverage buried: this is a settlement, not a ruling. The stipulated judgment resolves disputed claims with no admission of liability, and it still needs approval from the Los Angeles Superior Court and the bankruptcy court in the Southern District of Texas.4 Nothing here binds another company as precedent. What it does instead may matter more. Attorney General Rob Bonta’s office filed a complaint that names, clause by clause, the contract terms it considers illegal, and a judgment that names, clause by clause, what Carbon Health may no longer do.2,3 For a doctrine that has lived for decades in ambiguity, that specificity is both a compliance roadmap and a target list.
