Physicians have increasingly discussed the issue of physician unionization and collective bargaining, and it clearly has become a priority for the Young Physicians Section. Young physician members across the country have expressed frustration in dealing with hospitals and payors which have increased their dominance over health care delivery and patient care. The issue of physician unionization has come to the forefront due in large part to such frustration.

AMA Policy

Since 1987, our AMA has addressed the need for antitrust relief for physicians and frustration felt by physicians regarding their inability to collectively bargain or negotiate. The AMA House of Delegates has adopted numerous policies on these subjects. These policies are listed chronologically below:

H-385.983 Issues Relating to the Economic Representation of Physicians--(1) Through involvement in case-by-case adjudication and NLRB rulemaking procedures, the AMA supports attempting to expand the scope of non-supervisory, employed physicians to permit organization and representation of more physicians under the labor laws. (2) The AMA favors assisting, in a carefully controlled way, the organization and bargaining efforts of employed physicians by providing needed guidance and expertise. (3) The AMA believes that the AMA and medical societies generally are in a better position, both legally and professionally, than labor unions to assist physicians in their collective efforts. (BOT Rep. BBB, A-87; Reaffirmed: Sunset Report, I-97)

H-385.976 Physician Collective Bargaining--The AMA's present view on the issue of physician collective negotiation is as follows: (1) Congress is not now likely to change existing federal antitrust laws to provide special protection for physician collective bargaining. (2) There is more that physicians can do within existing antitrust laws to enhance their collective bargaining ability, and medical associations can play an active role in that bargaining. Education and instruction of physicians is a critical need. The AMA supports taking a leadership role in this process through an expanded program of assistance to independent and employed physicians. (3) The AMA supports continued intervention in the courts and meetings with the Justice Department and FTC to enhance their understanding of the unique nature of medical practice and to seek interpretations of the antitrust laws which reflect that unique nature. (4) The AMA supports continued advocacy for changes in the application of federal labor laws to expand the number of physicians who can bargain collectively. … (6) The AMA supports obtaining for the profession the ability to fully negotiate with the government about important issues involving reimbursement and patient care. (BOT Rep. P, I-88)

H-385.973 Collective Negotiations--It is the policy of the AMA to seek amendments to the National Labor Relations Act and other appropriate federal antitrust laws to allow physicians to negotiate collectively with payors who have market power. (Res. 95, A-90; Reaffirmed by BOT Rep. 33, A-96; Reaffirmation A-97)

H-385.971 Physician Negotiations with Third Party Payors--The AMA (1) will aid, encourage and guide medical societies in efforts to directly negotiate with any larger payor of medical services; (2) will negotiate with national third party payors with regard to national policies which arbitrarily interfere with patient care; and (3) will use its legal and legislative resources to the maximum extent to change the laws to permit physicians to fairly and collectively deal with third party payors. (BOT Rep. MMM, A-91; Reaffirmation A-97)

H-180.975 Insurance Industry Antitrust Exemption--It is the policy of the AMA (1) to continue efforts to have the insurance industry be more responsive to the concerns of physicians, including collective negotiations with physicians and their representatives regarding delivery of medical care; … (3) to analyze proposed amendments to the McCarran-Ferguson Act to determine whether they will increase physicians' ability to deal with insurance companies, or increase appropriate scrutiny of insurance industry practices by the courts; and (4) to continue to monitor closely and support appropriate legislation to accomplish the above objectives. (BOT Rep. DD, I-91; Reaffirmed: Res. 213, I-98)

H-165.954 Organized Medicine’s Role in Health Care Policy and Implementation--It is the policy of the AMA … (2) to continue to seek, as the highest of priorities, the necessary changes in the antitrust laws to permit involvement of organized medicine in the negotiating process, which is inherent in the development and implementation of all areas of health policy; … (Sub. Res. 206, A-92; Reaffirmed: BOT Rep. I-93-40; Reaffirmed by Sub. Res. 110, A-94; Reaffirmation I-96)

H-165.942 Negotiation Issue – Current Activities--The AMA will continue to … (2) pursue enhanced roles for physicians in private sector health plans, including lobbying for appropriate modification of the antitrust laws to facilitate physician negotiation with managed care plans and for legislation requiring managed care plans to allow participating physicians to organize for the purpose of commenting on medical review criteria, and including the development of an AMA team to develop the information and networks of consultants necessary to assist physicians in their interactions with managed care plans; (Reaffirmed: BOT Rep. I-93-25) and (3) enhance its activities in standard setting and enforcement, including the pursuit of protection from antitrust and tort liability necessary to facilitate self regulatory activities. (BOT Rep. QQ, I-92; Reaffirmed: BOT Rep. I-93-40; Reaffirmed: Sub. Res. 110, A-94; Reaffirmation I-98)

H-385.946 Collective Bargaining for Physicians--The AMA will seek means to remove restrictions for physicians to form collective bargaining units in order to negotiate reasonable payments for medical services and to compete in the current managed care environment; and will include the drafting of appropriate legislation. (Res. 239, A-97; Reaffirmation I-98)

H-385.947 Physicians and Unions--The AMA and state and county medical societies will continue their strong primary role as the advocates for physicians and work together whenever possible to enhance organized medicine's ability to represent physicians in the private sector. (BOT Rep. 41, A-97)

The ability of physicians to form and join a labor organization depends upon the type of relationship that each individual physician maintains with health plans and hospitals. For this report, physicians have been categorized in one of three ways: self-employed, employed or resident physicians.

For self-employed physicians, the primary barrier to collectively bargaining with health plans and other entities is antitrust law. Federal and state antitrust laws bar physicians who are not economically integrated from any collective action. The United States Department of Justice (DOJ) and the Federal Trade Commission (FTC) have sections dedicated to enforcing the antitrust laws in the health care industry. Numerous courts have found it illegal for physician groups to act collectively when all of the physicians in the group do not share in the financial risk.

To engage in collective bargaining, the bargaining process must be part of a labor dispute that concerns the terms and conditions of employment. The law generally views self-employed physicians as independent contractors, entrepreneurs, or independent businesses who do not qualify for the labor exemption under the antitrust laws. However, approximately 400 physicians in southern New Jersey recently petitioned the National Labor Relations Board (NLRB) to appoint Local 56 of the United Food and Commercial Workers to represent them in collective bargaining. The union officials maintained that AmeriHealth HMO is a de facto employer of physicians because it controlled material aspects of the physicians’ practices. On January 8, 1998, the Regional Director of the NLRB, denied the union’s petition for certification of representation without a hearing. In August 1998, the NLRB ruled that the regional director of the NLRB must grant the union an evidentiary hearing to determine whether in practice AmeriHealth exerts enough control over the physicians to warrant their being considered employees entitled to collectively bargain. The hearing was held in November 1998, and in late May, the NLRB’s Regional Director in Philadelphia issued a Decision and Order finding that physicians who are part of AmeriHealth HMO, Inc’s network of health care providers in Cape May County and Atlantic County, New Jersey are "independent contractors" and not AmeriHealth HMO "employees" within the meaning of those terms in the National Labor Relations Act.

In her Decision and Order, the Regional Director found, notwithstanding AmeriHealth HMO’s control over the kinds of services the physicians provide to AmeriHealth members, that the physicians: (1) exert substantial control over the manner and means by which they perform those services; (2) retain their economic separateness from AmeriHealth; (3) have practices existing independently of AmeriHealth; (4) have proprietary interests in their practices; and (5) posess wide entrepreneurial discretion that affects the profitability of their practices. Accordingly, the Regional Director found the physicians are indepedent contractors in their relationship with AmeriHealth HMO, and not AmeriHealth HMO employees as the Union contends, she ordered that the Union’s petition be dismissed. The Union may appeal the Regional Director’s Decision and Order by filing a request for review with the full NLRB.

There are some exceptions to the independent contractor rule. Some occupations, such as truckers who own and drive their own vehicles, musicians and screen directors, have been allowed to engage in collective bargaining as "non-employees". The courts have reasoned that unions should be allowed to collectively bargain on behalf of the employed as well as independent contractor members of an occupation, in order to preserve the integrity of the process for the former group.

The "messenger model" as outlined by the FTC and the DOJ, allows self-employed physicians to gather and present fee-related information to purchasers and agree upon fees with them. It allows self-employed physicians to agree on fee levels and market themselves as a network without engaging in price fixing.

The International Association of Machinists and the Federation of Physicians and Dentists have utilized the "messenger model" to help self-employed physicians form a network that can be marketed to payers. The DOJ Antitrust Division carefully monitors these messenger services to ensure that the activities are not in violation of the antitrust laws. The DOJ has investigated potential antitrust violations in Delaware, Connecticut, Florida and Ohio following complaints of anticompetitive activity by managed care plans. For example, on August 12, 1997, the DOJ filed a complaint in a Delaware U.S. District Court seeking to stop the Federation of Physicians and Dentists (FPD) from illegally conducting a boycott aimed at artificially maintaining high fees for orthopedic services in Delaware. Nearly all of Delaware’s orthopedic surgeons are members of the FPD and have agreed to designate FPD’s executive director as their agent to negotiate the fee levels that they would accept from Blue Cross and Blue Shield. When Blue Cross declined to deal with the FPD, the FPD allegedly convinced all member orthopedic surgeons to terminate their contracts with Blue Cross.

Employed physicians who are not supervisors or managers fall within the labor exemption of the antitrust laws and may engage in collective bargaining with their employers. Employers will likely challenge each physician’s eligibility to be in the bargaining unit because physicians direct other employees. The NLRB determines whether a particular physician embodies enough supervisory authority to eliminate them from the bargaining unit. The physician bargaining units at Thomas-Davis Medical Centers, P.C., in Arizona, Medical West Associates in Massachusetts, and Medalia Health Care in Washington were recently recognized by the NLRB. The NLRB has ruled that physicians employed by acute care hospitals are entitled to their own bargaining unit separate and apart from other professional employees.

In 1972, the NLRB ruled that resident physicians are students, not employees, thus excluding them from the National Labor Relations Act (NLRA) protections. The Committee on Interns and Residents (CIR), on behalf of the residents at Boston Medical Center, has filed a petition with the NLRB asking it to overrule the 1972 policy and hold that residents are employees entitled to collectively bargain. The NLRB decision is expected within the next few months. The NLRB’s decision will have a significant impact because there are approximately 90,000 residents and interns who are not affiliated with a labor organization. The CIR, affiliated with the Services Employees International Union (SEIU), has earmarked $1.4 million for organizing residents.

Laws in some states allow residents who are employed by a governmental institution to collectively bargain. The California Medical Association (CMA) recently signed a partnership agreement with the California Committee of Interns and Residents (CIR). The CIR will address issues such as hours and working conditions of residents, and CMA will address the professional issues.

Today, there is renewed interest in unions among residents. Hospitals, as part of their cost-cutting efforts, are placing more demands on residents that are unrelated to their education. Residents claim that hospitals have reduced their non-professional staffs and that they are demanding that residents perform many of the unskilled or menial tasks formerly handled by non-professional staff. Residents claim that these demands detract from their education and place unreasonable burdens on them.

In response to resident concerns, our AMA in 1998 strengthened residents’ rights under the Accreditation Council for Graduate Medical Education. In addition, our AMA supports the development of independent housestaff organizations to engage in good faith negotiation with training institutions. In 1998, our AMA assisted residents at Tulane University to form such a housestaff association.

Collective bargaining, physician unionization, and antitrust relief are growing concerns for physicians. Newspapers and professional trade journals continue to report the actions of residents, employed physicians, and self-employed physicians who have become increasingly aggressive in their pursuit of economic representation through organized medicine, guilds, unions, or union-like structures.

Employed physicians typically become interested in collective bargaining when: (1) employers set goals for increased productivity without consulting the physicians about the likely impact of those goals on the quality of patient care; (2) employers make significant changes in patient care facilities, staffing of the facilities, or administrative procedures used in the facilities without consulting the physicians; (3) employers demand reductions in physician income; or (4) employers break promises or use heavy-handed techniques to force physicians to make concessions.

Self-employed physicians feel that they lack the ability to negotiate with managed care plans or be involved in key decisions that affect the well being of their patients and the quality of care of their professional practices or training institutions. There have been several recent examples of unprofessional and egregious health plan tactics in contract negotiations and employment issues.

Self-employed and employed physicians are demanding a collective voice and action to not only address economic issues, but more importantly, to deal with the psychological impact of the current practice environment. Many physicians believe they have little ability to affect the administrative structures within which care is provided, the financing decisions that determine what kinds of care get provided and which patients receive that care. Their medical decision-making capability is being stripped away and they perceive that they are providing only limited, technical services to society. In today’s environment, professional identity and economic identity are inextricably intertwined. Thus, practicing physicians are increasingly limited in their ability to advocate on behalf of their patients because when physicians lose their economic identity they also lose their professional identity.

AMA has had extensive discussions with Representative Tom Campbell (R-CA) regarding his proposed bill to address the market power of health plans and to permit health care professionals to negotiate collectively with them. On March 25, 1999, Representative Campbell introduced H.R. 1304, "Quality Health Care Coalition Act of 1999." The Act provides an exemption under the antitrust laws. The Act states:

Representative Campbell believes the Act will create a more equal balance of negotiating power, will promote competition, and will enhance the quality of patient care.

AMA has also developed model legislation to create a "state action doctrine" at the state level that would permit self-employed physicians to negotiate with plans. To achieve the state action exemption, the state must, in practice, exercise some degree of independent judgement or control over the activity, in this instance, collective negotiation with health plans. The Texas Medical Association is pursuing state legislation to create a "state action doctrine" under the antitrust laws. On April 28, 1999, the Texas Senate passed a bill that would allow independent physicians and groups to collectively bargain with health plans. The proposed law would exempt certain doctor alliances from antitrust laws, and allow doctors to communicate among themselves while negotiating. An individual physician’s group could not account for more than ten percent of the market and could never strike or boycott. The state attorney general would be granted broad powers to oversee bargaining. Doctors could negotiate with health plans about the drugs they prescribe their patients, the appeals system for denied treatments and control of medical records. Physicians could not negotiate fees unless the health plan in question held significant market share, as determined by the attorney general.

In July 1999, the AMA Young Physicians Section brought forward to the AMA’s House of Delegates a resolution that became the focal point of debate as to whether physicians should collectively bargain. The AMA subsequently passed policy that:

• Asks our AMA to develop a national negotiating organization as an OPTION through which physicians and residents can stand together to fight for their patients' rights.
• Strengthens our AMA's Private Sector Advocacy activities, including proactively initiating litigation to stop egregious health plan practices
• Continues advocating for anti-trust exemptions for physicians, including activities supporting legislative and regulatory relief.
• Asks our AMA to develop an educational campaign for physicians and the public regarding the possibilities and limitations of a national negotiating unit.
• All AMA activities will adhere to current ethical guidelines and the Principles of Medical Ethics and will continue to maintain the highest level of professionalism for physicians.
• Continues to support the development of independent House staff activities.