Jan 1999 Table of Contents

Is There a Physician Union in Your Future?



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By joining forces with unions, some family physicians are hoping to overcome the unrealistic demands of managed care.

Fam Pract Manag. 1999 Jan;6(1):21-25.

“They just changed our scheduling. Now we're supposed to see four patients an hour,” says family physician Mini Liu, MD. “The people making appointments don't know whether it's a new patient, an existing patient, a refill or a very complicated case. It's just 15 minutes, 15 minutes, 15 minutes.”

Liu is a salaried employee at one of the clinics of the public hospital system in New York City. She is also a member of the Doctors Council, a 3,400-member independent physician union. She says Doctors Council representatives are negotiating with the hospital administration about structural and staffing changes and increased demands on productivity, and union staff have been keeping physicians apprised of the changes. For Liu, it's the difference between being involved and feeling hopeless.

“It's not just you as an individual doctor coming in good faith to your medical director any more,” says Liu. “There has been a lot of financial pressure on the system due to cutbacks and managed care. So now there's this whole other layer of organization that is much more corporate, and you need some kind of group organization to negotiate with this entity.”

KEY POINTS:

  • Physicians may not like the sound of unionization, but some are choosing it as a last resort.

  • Unions offer increased leverage, negotiating power and a unified voice for physicians.

  • The main criticism is that unions could push patient-centered care aside as physicians fight for their own rights.

When physicians of Medalia HealthCare, in the Puget Sound area of Washington state, began to feel the negative effects of the merger of two health care networks, they looked at their options and realized that forming a union would give them the organization they wanted plus legal protection under federal labor laws. With the help of the United Salaried Physicians and Dentists of New York, the Medalia physicians formed the Northwest Physicians' Alliance (NWPA), which was certified by the National Labor Relations Board (NLRB) as a bargaining unit in June 1998.

“Five years ago I never would have imagined myself doing something like this,” says family physician and NWPA co-president Jef-frey Lee, MD. “I'm very excited about this, not just for our particular situation here at Medalia, but I think there's a potential here to give a voice to physicians everywhere.” (See “Medalia: Why We Unionized.”)

Contract negotiations between Medalia HealthCare and NWPA, which represents approximately 220 physicians and optometrists, began in August. At press time, the two sides were still far apart on substantive issues such as hours of work, staffing and compensation, according to family physician and NWPA co-president James D. Vandermeer, MD.

“What's happening to physicians is exactly what happened to blue-collar workers during the industrial revolution,” says Grace Budrys, PhD, professor of sociology at De Paul University and author of When Doctors Join Unions. As medicine makes the transition from cottage industry to big business, Budrys argues, physicians are becoming workers in health care factories. Their jobs are being re-engineered so accountants can better keep track of revenue and expenses, their work is scrutinized by foremen, and they're being squeezed to do more with less. And, to complete the analogy, some physicians are unionizing, just like their blue-collar predecessors. But whether unionization will gain ground among physicians is still an open question.

A changing physician work force

According to the AMA, more than 756,000 physicians practice in the United States, including physicians in residency. Not counting resident physicians and federal government physicians, 43.3 percent of physicians in 1997 were employed (as opposed to practicing privately), compared to 32.9 percent in 1983. Excluding physicians employed by the federal government, 64.6 percent of patient care physicians in practice for five years or less were employed in 1997, compared to 37.2 percent in 1983.

Many of these physicians like the relative security of income and position that comes with being an employee. They don't want the headaches of running a small business. As employees, they are also more insulated from dealing with health plans. Some physicians simply prefer a practice environment or career path that happens to involve employed positions.

In a 1996 survey of AAFP members, 57 percent of respondents reported that at least half of their income came from a salary. While salaried family physicians work in a variety of organizations, the most common are hospitals and hospital systems, group practices, government agencies and group- or staff-model HMOs.

As the numbers of employed physicians have increased, unions have stepped up their organizing efforts. One reason unions want physicians, suggests Budrys, is that blue-collar jobs are going overseas. White-collar professional employees such as physicians, lawyers, engineers, government workers and information technology workers may represent the future of organized labor in this country. Physicians, in particular, are hot prospects because they epitomize the image of white-collar professionalism.

But employed physicians have not exactly rushed to join unions. According to the Department for Professional Employees at the AFL-CIO, approximately 42,000 physicians are members of unions, including about 6,000 to 9,000 resident physicians employed by hospitals. That's only 5.5 percent of all physicians practicing in the United States.

The reason for the small number of unionized physicians is fairly straightforward, says AMA President and family physician Nancy Dickey, MD. “Traditionally, physicians who have chosen employment have done so for a variety of reasons, including lifestyle choices,” she says. “Employed physicians have been reasonably content when they are paid well enough, when they have enough of a voice within their organizations, when they are treated with respect, and when the policies of the organizations are physician-friendly.”

But Dickey also notes that with the intense financial pressures on organizations that employ physicians and continuing market consolidation, “we can predict an increased interest in unionization in situations where management is not responsive to the needs of physicians and pursues strategies that undercut physician autonomy and squeeze them economically.”

The “U” word

There's also an image issue. Many physicians simply don't see themselves as potential union members. They don't perceive unions in a way that fits the image they have of themselves or their profession.

Others, like family physician MartinVancil, MD, of Gilroy, Calif., join unions, but not without some reservations. “I'm not particularly fond of the idea of physician unions,” says Vancil, a member of the Union of Ameri-can Physicians and Dentists (UAPD). “There's a risk of unionization altering the thinking and the practice patterns of physicians. They may become more interested in economics than in putting the patient's welfare first.”

So why does Vancil belong to UAPD? “They're willing to take a stand when they feel physicians have been wronged, and I think they've been more successful than anybody in defending physician rights and doing it with patient care still in mind,” he says.

NWPA's Lee doesn't buy the argument that joining a union makes physicians greedy, or that the public will automatically perceive unionized physicians as more self-interested. He says his recent organizing experience leads him to believe that physicians behave more, not less, ethically when they organize.

Perhaps the most potent concern is that unionized physicians will go on strike. (See “Would you strike?”) Union proponents counter that only a small percentage of union members actually strike and that unions don't tell physicians to strike. “Organized physicians themselves vote to strike,” says UAPD President Robert Weinmann, MD.

According to Weinmann, that has happened only twice in the UAPD's 26-year history, and both times management backed down. Besides, he says, modern unions use more sophisticated tactics, such as appealing to public opinion to pressure employers.

Would you strike?

The ultimate union weapon is the strike. But for most unions, striking is the last resort because it can impose severe hardship on its members and it carries no guarantee of results. Striking is even more distasteful for union physicians.

“I cannot foresee any circumstance where I would advocate a strike,” says family physician and Northwest Physicians' Alliance co-president Jeffrey Lee, MD. “On the other hand, it would be foolish for me to say that, if all my colleagues voted to strike, I would refuse to do so. But I think it's extremely unlikely that such action would be taken.”

Family physician and Doctors Council member Mini Liu, MD, is convinced that she and her colleagues at a public clinic in New York City would find ways to make sure patients don't suffer if a strike became necessary. She also rejects the implication that physicians strike for personal gain. “If they're pushing you on productivity beyond what you can do, then you're not going to give good patient care,” says Liu. “It's all connected.”

Antitrust reform

Another reason for the low numbers of unionized physicians is that self-employed physicians, who are most vulnerable to the economic leverage of health plans and have the most to gain by joining a union, are prohibited by federal antitrust laws from bargaining collectively about reimbursement issues. Some unions, however, are finding other ways to help these physicians (see “How unions assist self-employed physicians”).

Federal antitrust laws were originally intended to prevent vendors of goods and services from stifling competition by colluding to fix their prices. Both the U. S. Department of Justice and the Federal Trade Commission enforce these antitrust laws diligently, and penalties are stiff. It would take an act of Congress to change that.

That's why self-employed physicians are lobbying their elected representatives and their local, state and national associations. At the AMA's 1998 annual meeting, the House of Delegates adopted a resolution calling for the AMA to back antitrust reform and to establish a collective bargaining unit for its members.

Representative Thomas Campbell (R-Calif.) introduced “The Quality Health Care Coalition Act of 1998” in the House of Representatives in July 1998. This bill would allow self-employed physicians to engage in collective bargaining with health plans. The House Judiciary Committee, which has jurisdiction in the area of antitrust legislation, held hearings on the bill (H.R. 4277) but, due to impeachment hearings, was unable to act on it before the end of the 105th Congress.

“There were indications on both sides of the aisle that the status quo of a $16 billion company negotiating with a mom-and-pop doctor store was not really fair,” says AMA Vice President of Legislative Affairs Ross Rubin. Rubin says Campbell will reintroduce his bill in the 106th Congress and that the AMA will support it.

How unions assist self-employed physicians

Some physician unions, like the Federation of Physicians and Dentists (FPD) and the Union of American Physicians and Dentists (UAPD), establish independent practice organizations (IPAs) for their members. That's why family physician Martin Vancil, MD, joined the UAPD. Back in 1986, he and other physicians in Gilroy, Calif., were trying to form an IPA. The UAPD helped get the IPA up and running and asked the physicians to join the union in lieu of payment for its services. Vancil hasn't needed the union's help in the intervening 12 years, but he continues to maintain his membership. “I view this as a little bit of an insurance policy,” he says.

The idea behind union-connected IPAs is simple: According to federal antitrust law, unions may negotiate on behalf of their IPAs with payers but not on behalf of their self-employed physician members. When establishing an IPA is impractical, the alternative is a third-party messenger system. In this model, a union functions as an agent between its self-employed physician members and a health plan. What a union can and cannot do in this intermediary role without violating federal antitrust law is spelled out in a series of statements issued in 1996 by the U. S. Department of Justice (DOJ) and the Federal Trade Commission.

The main criterion is whether the union in its messenger role creates or facilitates agreement among competing physicians on prices or price-related terms. If it does, the arrangement by definition amounts to price fixing and violates federal antitrust law. What the messenger must do, then, is manage the process in a way that allows physicians to arrive at a fee schedule with payers without agreeing among themselves on the fees they are willing to accept.

In practice, this means that a union may gather and compile economic data on usual and customary charges for frequently performed procedures, on maximum allowable Medicare rates and on reimbursement rates from the major payers in a particular market. An analysis of this data showing averages, highs and lows and the relationships to the Medicare rate can then be made available to the union's members, along with actual contract offers from payers. Individual physicians then make independent unilateral decisions to accept or decline the offers.

In relaying this information to the payer, the messenger may aggregate the fee ranges individual physicians are willing to accept in a schedule showing what percentage of physicians fall within each range. However, the messenger may not share this information with physicians.

Physicians may authorize a messenger to accept contract offers on their behalf and help them understand the contracts offered. If a contract contains language that is unacceptable to a physician, the messenger may suggest different language in the physician's counteroffer.

“It's a cumbersome system, but it's better than nothing,” says Jack Seddon, FPD executive director. “It at least gives self-employed doctors enough information to make solid business decisions. That's why the insurance companies don't want us to use this system and why they're all crying to the DOJ.”

Seddon is alluding to a DOJ complaint filed in August 1998 in Delaware, where nearly all orthopedic surgeons are FPD members. These physicians designated Seddon as their agent in negotiations with Blue Cross and Blue Shield of Delaware, but when Blue Cross refused to deal with Seddon, the surgeons terminated their contracts with Blue Cross. The DOJ complaint charges that in this case the FPD misused the third-party messenger arrangement by organizing an illegal boycott of its members to maintain their high fee levels.

“Our position remains that there was never a boycott,” says Seddon, “that it was Blue Cross and Blue Shield that locked out the doctors by unilaterally making changes in the reimbursement rates and refusing to negotiate with them individually or through a facilitator.”

At press time, FPD attorneys were in discussions with the DOJ in an effort to reach a consent decree in this civil action. Meanwhile, Blue Cross and Blue Shield of Delaware has negotiated individual agreements with the physicians.

Organized medicine's role

The AMA faces at least two roadblocks when it comes to representing its employed members for collective bargaining purposes. To maintain its tax-exempt status, the AMA must work for the benefit of all physicians, not just employed physicians. Second, the ranks of its employed members include physicians in management positions, which would be incompatible with the definition of a labor organization. A separate labor organization affiliated with the AMA would be one way to circumvent these problems.

Officially, the AMA supports collective bargaining for physicians but is opposed to unionization. Dickey agrees that physicians need ways to beef up their leverage at the negotiating table, but she's concerned that unionized physicians may put self-interest ahead of patients and that physicians' patient-centered ethic may be compromised by affiliating with other unions. “Going on strike is hard to turn into a pro-patient message,” she says.

The AAFP's position on unions is similar to the AMA's. Historically the AAFP has opposed unionization, says Academy President Lanny Copeland, MD, “But given the changes that are taking place within the marketplace, physicians may well need to look at collective bargaining for better leverage. After all, IPAs, PHOs and the like are using this approach to get ‘strength in numbers.’ While unionization would be of concern, the use of collective bargaining among physicians may have a place.”

The AMA has actively supported collective bargaining by employed physicians in at least one instance. When Rockford Health System physicians in Rockford, Ill., formed the Rock-ford Physicians Council (RPC) in 1997, the AMA provided strategic and financial support.

Three months after RPC's first meeting, the Rockford Health System administration introduced its plan for an enhanced physician leadership structure. For many physicians, this plan was enough to neutralize the organizers' agenda, so RPC decided to hold off on an election for certification by the NLRB.

At least two state medical associations, the Florida Medical Association (FMA) and Cali-fornia Medical Association (CMA), recently deliberated about representing physicians in collective bargaining. A resolution from the FMA's 1997 House of Delegates charged the association to conduct research into unions. The results were presented with a recommendation to form a physician guild, but the FMA House rejected it, voting instead to set up an advocacy center for patients with managed care problems.

Most California physicians are already in group practices, independent practice associations (IPAs) or other physician-led organizations that provide for democratic decision-making and collective action, says family physician and CMA Chief Executive Officer Jack Lewin, MD. Only two groups, resident physicians and government-employed physicians, have approached CMA about some sort of collective bargaining arrangement. Both groups are already unionized, but would prefer representation affiliated with a physician group, according to Lewin. At its September meeting, the CMA board of trustees voted to encourage the California Association of Interns and Residents (CAIR) to affiliate with the national Committee of Interns and Residents (CIR). If such an affiliation happens, CMA will work with CIR to promote joint CMA/CIR membership and pursue common interests through judicial and legislative advocacy.

At least three major unions, the American Federation of State, County and Municipal Employees (AFSCME), the Office Employee's International Union (OEIU) and the Service Employee's International Union (SEIU), have already volunteered their services for AMA members. They are joined by the Union of American Physicians and Dentists and the Federation of Physicians and Dentists. Instead of reinventing the wheel, they argue, the AMA should affiliate with an experienced labor organization to represent its members.

The future of physician unions

Hospitals and insurance companies have become corporations that sell health care, and physicians are either going to be owners in these corporations or they're going to have to be in an organized work force. That was the message of an article by Christopher Wang, MD, director of family medicine at New York Presbyterian Hospital and assistant professor of clinical medicine at Columbia University, in the February 1996 issue of Family Practice Management. Wang still sees some opportunities to practice independently, but as markets mature, he believes those opportunities will disappear.

Budrys points out that physicians in most European countries are unionized because there's no stigma attached. In the United States, however, the stigma remains. Doctors unionize only if they are “pushed to the wall,” as Budrys puts it; but it's too soon to say whether the majority of physicians will ever feel that they have no alternative to unionization. “The driving force behind what's happening to physicians is that there's so much competition between managed care organizations,” says Budrys, “so the future of physician unions will depend in large part on whether that competition becomes more, or less, intense.”

Bob Carlson is a freelance writer who writes exclusively about health care. He lives in Indianapolis.

 

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