We continue with our series of articles penned by one attorney, an MD, JD, giving you a view of the world through a malpractice plaintiff attorney’s eyes. In this article, the author addresses “Can Doctors Form a Union”. This attorney is a seasoned veteran. The series includes a number of pearls on how to stay out of harm’s way. While I do not necessarily agree with 100% of the details of every article, I think the messages are salient, on target, and fully relevant. Please give us your feedback – and let us know if you find the series helpful.
Can doctors form a union? Not a civil union. But a legal entity to “collectively bargain.”
Doctors are a ferociously independent lot – the proverbial unherdable cats – but as financial and regulatory pressures mount – this question is increasingly asked: Can we form a union to level the playing field?
There is certainly strength in numbers, a strength on which collective bargaining is based.
However, doctors are different than typical union members because doctors include independent entrepreneurs, physicians in training, AND employees.
A union cannot include all of these categories. For example, a union doesn’t ordinarily include a salaried car designer as it does for a salaried factory line worker in an auto plant. If these individuals are part of a union, they are part of different unions.
Let’s look at the various types of physician work situations to see how they fare regarding the possibility of unionization.
1. Independent private practitioners.
When independent physicians (who typically compete with each other) decide to join together to set fees and negotiate with payors, this looks like collusion to the government. When a group of independent physicians stage a boycott of a payor that rejects their fee schedule, it may look like tough collective bargaining to the doctors, but it looks like price-fixing to the government.
The salient issue vis a vis unionization is at what point is concerted activity not impermissible collusion (and immune to anti-trust laws).
Over time, this legal test evolved: is the effect of the union, on balance, to restrain trade (subject to anti-trust regulation) or to effectuate labor-management relations (not just exempt from anti-trust regulation but actually protected by statute)?
Doctors attempting to organize are fully subject to this analysis because the “learned professions” such as medicine and law are subject to anti-trust regulation to the same extent as any other providers of goods and services.
Under this analysis, trying to set up a minimum fee schedule would be an anti-trust violation.
The alternative then is to be a certified labor union and so enjoy the statutory exemption from anti-trust regulation afforded those organizations. However, unions are for employees, not for independent business owners like doctors in private practice.
Just calling an association of individuals who practice independently a “union” doesn’t make it one.
American Medical Association v. United States was a pivotal case on this issue. The government charged that the AMA, the Medical Society of Washington, D.C., and individual physicians had violated the Sherman Anti-Trust Act by colluding to coerce doctors (a) from accepting employment under Group Health (a government employee healthcare program); (b) from consulting with Group Health physicians; and (c) to persuade hospitals from caring for Group Health patients. The case reached the Supreme Court. The Court rejected the defendants’ claim that this was a labor dispute and so qualified as protected union activity. The Court noted that the AMA and its co-defendants were comprised of individual practitioners who were not, and did not want to be, employees.
These principles are still sound law. An attempt by individual practitioners to form a collective bargaining group would likely fail on anti-trust grounds.
Unless your situation can actually meet the anti-trust Guidelines that the Federal Trade Commission (FTC) and the Department of Justice (DOJ) have promulgated, you can’t wear a doctor union cap. These guidelines require that physicians hoping to engage in joint negotiations must “have sufficiently integrated their practices such that they are no longer viewed strictly as competitors for this purpose.” Assume that any attempt to band together with your colleagues to press for common interests is going to be subject to anti-trust regulations.
on behalf of the IPA. He’s just a messenger. And, as metaphorically articulated by Shakespeare, don’t kill the messenger.
A messenger may not do individually what the physicians cannot do collectively. If it can, the government will look to “pierce the veil” of the messenger model.
An illustration: In a Florida case, an IPA consisted of competing general and vascular surgeons who made up the majority of surgical staff at five hospitals. The IPA hired a consulting and accounting firm as its messenger. The agent “informed” the payors that the physicians would terminate their contracts and refuse to participate in the plan networks unless their fee demands were accepted. The DOJ argued that the activities were, albeit delivered via a messenger, just garden variety illegal joint negotiations, using illegal threats of boycotts as a tool. The IPA settled.
Given the strong scrutiny that messenger systems receive and the limited scope of their activities, they have not gained wide usage.
2. Employee physicians
Physicians employed by a hospital or healthcare system CAN unionize as long as they are actual employees. Typically, this means being paid a salary reported on a W-2 form. Salaried doctors at public hospitals can also unionize.
This necessary status as an employee excludes supervisors. That detail has been repeatedly used (or abused) by hospital employers who do not want their physician staff to unionize.
The “supervisor” issue was at issue in a Washington State case. There, doctors at 46 primary care clinics voted to be represented by the United Salaried Physicians and Dentists Union. Their employer, Medalia Healthcare, argued to the National Labor Relations Board (NLRB) that the doctors were “supervisors” because they were clinic administrators or served on management committees. The NLRB sided with the doctors, concluding they could organize. The reason: they did not have authority to hire, fire or make managerial decisions. Under the National Labor Relations Act, these characteristics defined a “supervisor”. This standard has been upheld in subsequent cases, including in Arizona and New York.
private practitioners as “employees” by arguing “de facto employment” have failed.
In United Food and Commercial Workers v. AmeriHealth Corp, a blue collar union wanted to represent 450 New Jersey physicians in negotiations with their HMO. The union argued the HMO imposed so many conditions on the practice of medicine and on the doctors themselves, that the doctors were reduced to being employees. However, the NLRB agreed with the HMO that since the doctors made independent medical decisions, provided their own facilities and support staff, and could leave the HMO at any time, they were independent contractors and not eligible to unionize.
3. Physicians in training
Interns, residents and fellows are a special sub-set of salaried hospital-based physicians. Of course we knew that already.
In a 1999 case (Boston Medical Center) the NLRB held that interns, residents and fellows are employees subject to the national Labor Relations Act. This case involved a merger between a public hospital that had permitted its physicians in training to engage in collective bargaining and a private hospital that opposed that.
The NLRB’s decision noted that post-graduate training is an essential part of medical education. But, it concluded house-staff qualify as employees because they work for the hospital and are paid for doing so. Unlike traditional students sitting primarily in classrooms learning didactically, interns, residents, and fellows spend most of their time engaged in patient care, often relatively independently.
The NLRB characterized them as “junior professional associates”, analogous to “apprentices in the traditional sense.” Accordingly, interns, residents and fellows are included in a broader category of employee physicians vis a vis the NLRB’s rules regarding appropriate bargaining units.
The issue reared its head again in a 2010 case that was firmly resolved in favor of continued employee status for physicians-in-training (St. Barnabas). The Service Employees International Union filed a petition for an election among the house staff of St. Barnabas Hospital that was upheld by the NLRB. The hospital appealed claiming that the house-staff were basically like teaching assistants. The NLRB rejected the appeal and reaffirmed Boston Medical Center and the employee status – and right to unionize – of interns, residents and fellows.
In summary: Physicians who are hospital employees (or collective employees of a different large organization) may unionize. Physicians still in training now have an enforceable right to unionize under the National Labor Relations Act. Independent physicians who attempt to unionize will likely violate anti-trust laws.
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what happens when residents work at a not for profit/ non union hospital? are they allowed to unionize?what about minimum wage requirements? do physicians in training make minimum wage? when I was in training 20 years ago, I calculated that I didn’t. can they demand minimum wage even if they are not unionized?
I am always awestruck by the hypocrisy of these one-sided arguments. These legally evolved theories and statutes seem to apply to physicians only but do not apply in reverse to other entities.
For example, in using the above rationale:
“Over time, this legal test evolved: is the effect of the union, on balance, to restrain trade (subject to anti-trust regulation) or to effectuate labor-management relations (not just exempt from anti-trust regulation but actually protected by statute)?
Doctors attempting to organize are fully subject to this analysis because the “learned professions” such as medicine and law are subject to anti-trust regulation to the same extent as any other providers of goods and services.
Under this analysis, trying to set up a minimum fee schedule would be an anti-trust violation,”
One might ask, “Is the effect of the health insurance company, on balance, to restrain trade or effectuate provider and payor relations?” With maximum allowable payments, which are generally quite similar between insurance companies, Does this not generally discourage more competition in the marketplace between physicians? Does this generally not discourage the number of physicians entering into the marketplace? Are not insurance and actuary science learned professions? Why wouldn’t they be subject to antitrust regulation to the same extent as any other providers of services?
Using the same logic, why is setting up a maximum fee schedule not an antitrust violation? A minimum fee schedule by physicians is not okay but a maximum fee schedule by insurance companies is okay? This is simply a illogical. Let’s face it, every insurance company is aware of every other insurance company’s fee schedule whether they communicate purposefully or not. This is, in effect, collusion and should be subject to the same antitrust statutes and principles as physicians Or physician groups. Alternately, physicians or physician groups should be entitled to the same privileges that insurance companies currently now enjoy.
Finally, the simplest solution of all is for all Physicians to reject insurance altogether and accept reasonable fee-for-service fees. This would free physicians from insurance company constraints as well as the vast majority of government regulatory constraints.
The McCarran–Ferguson Act, 15 U.S.C. §§ 1011-1015, as a federal law exempts the business of insurance from most federal regulation, including federal antitrust laws to a limited extent. The McCarran–Ferguson Act was passed in 1945 after the Supreme Court ruled in United States v. South-Eastern Underwriters Association that the federal government could regulate insurance companies under the authority of the Commerce Clause in the U.S. Constitution.
Then the McCarran Ferguson act should be challenged as Essentially bad law. Whether one wants to call an insurance company a “union” or not, that’s essentially how it functions relative to physicians In a reverse manner. The same principles apply.
Besides, the commerce clause as it was originally intended to be applied prior to the Wickard case (I believe this is true, if not I apologize ) only applied to commerce between the states. As most every insurance company does business with in each state And still does not do business across state lines from company to company there should be a large gray area as the commerce clause applies to insurance companies. With this viewpoint, Mccarran Ferguson could easily be challenged. I believe that there is a case currently before the US Supreme Court challenging the Wickard ruling.
There are two glaring points with which I disagree: The author is a plaintiff’s attorney and a medical doctor. The opinions, then cannot be unbiased.
In the book “Three Felonies A Day” by Harvey A. Silverglate, a defense attorney, he describes the methods used by the inJustice Department to destroy the lives of good people, some of them doctors. About halfway through, I realized the book was written to cause sympathy for the accused, rather than be a warning of an over weaning government.
The practice of medicine should not be interfered with until and unless, there is some wrongdoing. Mistakes will be made, and reparations should be made.
However, the right of doctors, or members of any profession, to associate is inviolable. The right to life, and sustaining that life, is also inviolable.
With the exception of Representative Joe Heck, I have never met a doctor who was not a valuable member of our society. They, as a whole, hold themselves to a higher standard. The government and others should butt out of their business. Peace. Robert Walker
There has been talk, in the recent past, about Congress terminating McCarran Ferguson to allow insurance companies to sell across state lines. If McCarran Ferguson were repealed, then insurance carriers would more clearly be subject to anti-trust oversight.
Interestingly, accountable care organizations, on the surface, would seem to be subject to anti-trust oversight. My understanding is that such organizations will be given either explicit or implied waivers to allows disparate actors (many of whom might not be part of the same corporate structure) to aggregate to deliver healthcare.
The Supreme Court, in ruling in favor of the Accountable Care Act, did so on the basis of the federal governments’ right to tax. They did not rule in favor of the ACA based on the Interstate Commerce clause, as may had anticipated. In doing so, many legal scholars believe the Supreme Court took the first step in curtailing the right of the federal government to regulate based on Interstate Commerce Clause (which had been bedrock law since the 1940s when the Wickard case – referenced above – was decided).
Much of the terrible political/economic damage done to healthcare providers was done in Congress by Representative Pete Stark. And it was done right under our noses. Business transactions that are perfectly legal outside of healthcare were remanufactured into felonies.
Healthcare providers have an inherent sense of guilt for “profiting” from the illness or distress of others. Government capitalized on this sense of guilt in the name of trying to reduce healthcare costs on a global basis. It’s not as if healthcare providers themselves are the chief contributor to those high costs.
Statistically, hospital care and new technology was the driver of those costs, as well as legally induced defensive medicine.
Healthcare providers have a history of internecine battles, in which they pitch themselves against their own brothers and sisters to scramble for the scraps left over from a damaged system. You see evidence of these battles every day.
We could have banded together to fight against Pete Stark and his ilk, instead of wallowing in our own psychological projections of self hatred. This is not psychobabble. Our adversaries recognized this and simply acted on it. We acquiesced and apologized for treating patients and getting paid for it.
Banding together to negotiate fees is illegal. But banding together to fight in Congress and legislatures is NOT. We could still do it. Instead of our own pathetic professional associations, all paid healthcare workers could collect and fight together. That would truly be a “force puissante”
We were already divided. Government and our legal system simply capitalized on it. We brought this on ourselves.
Michael M. Rosenblatt, DPM
Lets face it, if the health insurance companies were colluding together then true competition would not exist between them and we would see proof of this by:
1. increased cost: rising premiums, rising copays, rising deductibles, rising co-insurance, etc.
2. decreasing quality: reduced benefits, denial of treatments on the rise, narrow networks including the lowest cost (and probably quality)providers, denial of care labeled as preexisting.
…OMG, this IS happening!!!
“Under this analysis, trying to set up a minimum fee schedule would be an anti-trust violation.”
And when government decides to set a “maximum fee schedule,” why is this not an anti-turst violation–on ~its~ part? Granted, they have more and bigger guns, but at least in theory, they’re supposed to obey the same laws they set out for the rest of us.
I think physicians are unionized in a lot of the European countries. Perhaps someone out there can correct me. So that should tell us a little history of how well it works.
With over half of U.S. physicians now getting a paycheck from a corporate employer, the average physician has different moral/ethical concerns from mine. Being employees make it easy for them to resort to the familiar refrain of “It’s my job!” when challenged about their lack of moral responsibility. This is the first thing that came to mind when I saw you were discussing physician unionization. And as in Europe, probably if they are going to be employees, they do need a union. I would just rather they were not employees as this creates an inescapable conflict: the physician must first serve his employer and then serve the patient.
It would be nice if there were a national organization representing the welfare of physicians and patients. Something like what the AMA claims to be but is not. Ideally I might prefer lobbying from that sort of group over collective bargaining by physician employees. For now I would prefer that the physician employees change jobs when asked to work for too little money or when asked to do unethical things.
The very fact that we are discussing the issue of physicians’ joining unions, and that legality is part of the fact that Congress has (already) stolen our freedoms. It is incredibly easy to run afoul of Federal laws in any contractual interchange between healthcare providers.
Supposedly Congress created “safe harbors” which if you stay within them; you have less of a chance of being charged with fraud by the Federal Government. Of course, once that charge is made, your life is over. When your patients read this in the newspaper, they think you are a criminal. Little do they know or understand that before Pete Stark, nothing you did was illegal. Your neighboring oil company continues to do the same thing. Nobody there will go to jail.
Federal investigators and prosecutors use actions against healthcare providers as a notch in their belt toward career advancement. You are guilty before you are innocent. Often it is a matter of minute legal interpretation, staged of course by attorneys FOR attorneys.
None of this was necessary. All we had to do is fight Pete Stark. Congress anointed Stark with their crown of “Congressional healthcare expert.” His entire agenda was to gut, limit and control healthcare providers according to his own hyper-liberal, regulating stance. All it would have taken is for some reasonably conservative co-legislators (with our support) denying him the right to “felonize” us.
It was not a matter of his skill or expertise. He is not a physician. It was strictly a matter of a socialized political agenda, not unlike what we are now (also) experiencing in the White House.
I am not one to bandy about political jargon for the sake of “shock value.”
Like Lil’-Abner once said: “I calls it like I sees it.”
Michael M. Rosenblatt, DPM
Actually a lot would improve if physicians just stopped communicating with and cooperating with Medicare, Medicaid, Champas and third-party interference generally. It seems rather silly to be going to all the trouble of unionizing in order to successfully consort with third party payers when the alternative is to just quit consorting with them entirely and be paid by patients in cash.
The socialists such as the President as terrified of Health Savings accounts because they represent paying cash for what you get from doctors. The socialists fear this because it works so well and patients love the economy, autonomy and good service they experience once they start to pay their own way. Physicians generally these days, especially the 50% plus number of them who are now EMPLOYEES rather than being self-employed, want the ease of an automatic paycheck so badly that they morally compromise themselves every day in order to get this convenience. What a shame. Doctors who opt out of Medicare and other third party payers’ contacts find they CAN make a good living with the added perk of being able to respect themselves again.
” Banding together to negotiate fees is illegal. But banding together to fight in Congress and legislatures is NOT ”
Attorneys in the US contribute money to lobbying groups a lot more than physicans do. Special interest groups such as American Association for Justice (formerly American Trial Lawyers Association or ATLA) have a considerable influence on the legislative process in DC. Last time I looked around for a powerful lobbying group for the physicians, I found none! This is why very few if any of my colleagues have a membership in AMA (which many consider as ineffective). I think the key word for physicians here is ORGANIZING rather than UNIONizing if you will. Once organized in putting efforts and funds for our cause, we will see results.
The only physician group I am aware of which is pro-physician and pro-patient is the Association of American Physicians and Surgeons and they do sue the government over its many sins and wickednesses in relation to doctors and patients. If anyone reading this is unaware of this group they should check it out at http://www.aapsonline.org. Their journal is very inspiring and so are their newsletters.