Physicians' Unions: A Growing Power

May 1, 1999
Volume 16, Issue 5

According to one estimate, 42,000 of the 757,000 practicing physicians in the United States-roughly 5.5%-were members of a union by the middle of last year. That number appears to have grown. The union movement is sweeping the medical profession around the country.

It's the turn of the century. Workers, feeling oppressed by management and hoping to regain some control of working conditions, flock to the labor movement, hoping that solidarity will give them the leverage they need.

One hundred years ago? Yes-and no. While the conditions that led to the creation of International Ladies' Garment Workers' Union and other unions in the early 1900s have largely been ameliorated, a new group of workers is turning to organized labor for help in coping with a seemingly out-of-control marketplace. But today, the workers are physicians.

According to one estimate, 42,000 of the 757,000 practicing physicians in the United States-roughly 5.5%-were members of a union by the middle of last year. That number appears to have grown.

The union movement is sweeping the medical profession around the country:

New Jersey-500 doctors have asked the National Labor Relations Board (NLRB) to allow them to join the United Food and Commercial Workers union to negotiate with AmeriHealth, a health maintenance organization that covers nearly 270,000 residents.

Washington, D.C.-The American Medical Association has added its conservative reputation and its muscle to a battle between the Federation of Physicians and Dentists and the Federal Trade Commission over antitrust laws that preclude private practice doctors from bargaining with insurers and managed care companies. The AMA has also helped staff doctors in Rockford, Ill., and at Tulane University in efforts to create bargaining units.

Tucson, Ariz.-Doctors won an NLRB election, allowing them to join the Federation of Dentists and Physicians to negotiate with Thomas-Davis Medical Centers. Management refused to bargain with the physicians and eventually declared bankruptcy. "Winning the battle caused [physicians] to lose the war," said one observer.

Seattle-Staff physicians at Medalia Health Care Clinics joined the United Salaried Physicians and Dentists Union, an affiliate of the Service Employees International Union, to create the largest private-sector physician bargaining unit in the country. Medalia subsequently filed for bankruptcy, but the union will continue to bargain with its successors.

Pennsylvania-A group calling itself the National Guild of Medical Providers has affiliated with the Office and Professional Employees International Union, an affiliate of the AFL-CIO.

Oakland, Calif.-The Union of American Physicians and Dentists reports having 10 contracts in force with managed care organizations covering 5,000 doctors. In addition, it has formed its own Independent Practice Association and negotiated contracts with 12 managed care organizations on behalf of 800 physicians.

New York-The Doctors Council, United Salaried Physicians and Dentists, and the Committee of Interns and Residents join to create the National Doctors Alliance with more than 15,000 members covered by collective bargaining agreements.

In Congress, Conservative Republican Rep. Tom Campbell of California has joined forces with Democrat John Conyers of

Michigan to introduce legislation that would allow medical professionals to form their own associations and bargain with insurers without fear of violating antitrust laws. A spokesperson for Campbell indicated that the House Judiciary Committee could be ready to draft a final version of the bill for action by the House by early summer.

Campbell sees his legislation as a means of "allowing market forces rather than the federal government to establish rules that specify the insurer-medical professional relationship." He is especially critical of the McCarran-Ferguson Act, a 1945 law that grants the insurance industry broad immunity from antitrust regulation.

"McCarran-Ferguson needs to be repealed," said Suhail Khan, an aide to Campbell. "In the absence of repeal, there needs to be a movement to provide antitrust relief to balance out the powers given to insurance industry. This bill would provide that relief for doctors, dentists and other health care professionals."

Salaried doctors-house staffs and physicians working in government hospitals and clinics-are eligible for membership in unions under certain circumstances. Private practice physicians, however, are treated as small businesspeople by the law. Engaging in organizing would be considered an antitrust violation for them.

The Federal Trade Commission, which has actively opposed previous legislation aimed at allowing doctors to organize, favors what is described as a messenger model that permits a doctor to hire a representative to negotiate with insurers. However, while physicians can communicate with the messenger, they are not supposed to communicate with one another. That would be price-fixing, which is illegal.

Under existing laws, "If independent doctors got together it would be considered price-fixing and a violation of antitrust law," said Mark Levy, executive director of the National Doctors Alliance. "But if two insurance company CEOs play golf, it's not considered antitrust, even if they merge.

"These rules were based on an antiquated economic system that doesn't exist anymore," he added.

The problem with the messenger model, Levy said, is that "the messenger is not allowed to bring together or relate to other people in the same category. You can have 500 doctors in a county, all of whom get insurance business from X company, and each one of them can hire a lawyer, but the lawyers can't talk to each other."

In her book, When Doctors Join Unions, Grace Budrys, Ph.D., noted exactly how much the health delivery system has changed. "Nearly 70% of all physicians are salaried," she wrote, "77% of the population is in managed care organizations, 93% of which are owned by for-profit firms.

"Doctors are now taking orders from all kinds of people who have no medical training," she continued. "They must get pretreatment approval from an insurance company's clerical employee, located in some other city. Health care decisions are made by third parties, and doctors no longer have personal responsibility for their patients."

The idea of doctors joining unions is not new. The Committee of Interns and Residents (CIR) dates back to 1957. The Union of American Physicians and Dentists (UAPD) began organizing doctors in 1972. Both organizations have enjoyed moderate success in the past, with CIR organizing house staffs and UAPD concentrating, until recently, on representing doctors employed by state or municipal health systems.

Budrys, a sociology professor at DePaul University, said the impetus for doctors to join a bargaining organization has come in waves.

"There was an early 1970s wave," she said in an interview with Psychiatric Times, "which was largely a response to what happened in [the] 1960s, with all the government legislation-and to some extent, the malpractice crisis. The second wave came in 1983-1984, and was largely concerned with the malpractice issue. Now we're in the third wave, and this one is in response to managed care. The previous two waves just let off some steam, and that's where it ended.

"In the 1970s, the doctors couldn't count on the AMA to represent them appropriately. They had no one to turn to," she said, so they have turned to unions.

Today, even the AMA favors a stronger voice for doctors in dealing with managed care. "We are in the midst of-having twice been directed to do so by the House of Delegates-forming a national bargaining unit for employed physicians," said William Mahood, M.D., a member of the AMA Board of Trustees.

"We now have a very strong policy favoring the ability of physicians to come together and collectively negotiate with third-party payers who have the dominant position in the marketplace," Mahood said.

"But we need to add also that it is a policy that considers the withholding of care for any reasons as being totally unethical. We are against the threat of strikes or work stoppages or other euphemisms for interrupting delivery of needed care to patients," he added quickly.

It is the specter of possible strikes that managed care organizations and insurers have turned to when condemning doctors' moves toward collective bargaining. Responding to the Campbell bill, the Health Insurance Association of America issued a statement that said, "Patients want doctors in their offices and hospitals caring for the sick, not carrying picket signs on street corners. How will the threat of work stoppages and wildcat strikes improve quality of care to patients?"

"What I hear pretty consistently is that one of the major roadblocks is the unwillingness of most physicians to go on strike," added Susan Pisano, a spokesperson for the American Association of Health Plans. "I think as a practical matter this is not an activity that most physicians will or want to engage in."

Carol Schadelbauer, a spokesperson for the American Hospital Association, declined to discuss the issue of unionization with

Psychiatric Times, except to say that "Generally, we would say we have some sense of concern because of the situation. Our priority is the patients."

By and large, however, doctors and their representatives are not talking about striking; they say they are seeking a level playing field with managed care organizations and insurers.

In a recruitment pitch for prospective members, for example, the Office and Professional Employees International Union says, "All professionals really want is equal and just treatment for themselves and their patients. To some individual health care professionals, affiliating with a union is considered beneath their professional status. But the facts now dictate otherwise. The Union can be another tool in the physician's bag with which to effectively care for his/her patients in a reasonable and fair manner."

"Private practice doctors...are facing a loss of control over the practice of medicine as they feel it should be practiced, and they're seeing their incomes cut, and they're not happy," Gary Robinson, executive director the UAPD, told Psychiatric Times. "By organizing, they feel they can have some impact on quality-of-care issues. There's always a compromise: You have your goals, which are very high, and then there's the reality of what the companies are coming in with. We've been able to get some nice improvements, such as due process rights and giving the doctors a mechanism for filing complaints and how to get things accomplished."

Despite an almost knee-jerk initial opposition, some managed care providers are beginning to appreciate the opportunity to negotiate with physicians as a group. "[Managed care] companies are not interested in dealing with physicians on an individual basis," Budrys said.

Robinson says his experiences in negotiating with managed care organizations often have been positive. "We'll talk to them. Maybe they'll have a standardized contract. We'll review it and propose some changes. Oftentimes the changes are in the area of process: the right of doctors to protest decisions, the right of them to discharge or not discharge a doctor. On a couple of occasions, we've said this is the wrong contract, and they've asked us to draft a contract we felt was better."

But even as the growth of managed care has become the impetus for doctors to organize, it now appears that there are cracks in the managed care system. This system may not be the entity that doctors must ultimately relate to.

"This industry is in near-chaos," Robinson said. "Sometimes they hire people who are not particularly knowledgeable. The people who are good are constantly changing jobs. In one national company, the key representative we were dealing with turned over eight times in the first 18 months. We had to train eight new people and tell them what they're supposed to do.

"Many of the HMOs and IPAs are on the verge of bankruptcy," he added. "Every single one in our area is losing money at a rate that is not sustainable. In the short term, we're going to get a tremendous amount of members from that."

Levy agrees. "My own sense is that [HMOs and IPAs] really are sort of transitional forms. Ultimately, most doctors will become salaried, working for some form of health care provider, which could be a hospital or an insurance company."

In the meantime, Budrys says, the future of unionized physicians will rest with the government. "Legislation will have a lot to do with where that goes," she said. "All the unionized physicians who belong to the two major unions are now affiliated with the AFL-CIO. There are lots of benefits to doing that...People are discovering what kind of power they have."

"I don't think we will ever go back to business as usual," the AMA's Mahood added. "I hate to use the term paradigm shift. We've gone through a transition, or we're in the process of transition, which is at the very least dramatic and which is taking us away from fee-for-service, cottage industry, authoritarian, male-dominated practices. We're never going there again."