Doctor unions: Time to join the parade?

Physicians are taking a fresh look at collectivebargaining—and even independents are signing up. Should you beone of them?

By Susan Harrington Preston, Senior Associate Editor

Last November, the National Labor Relations Board overturneda 23-year-old precedent and ruled that the privately employedresidents and interns of Boston Medical Center were eligible tobargain collectively. The decision added 92,000 doctors-in-trainingat private hospitals nationwide to the 108,000 other physicianswho were already eligible to unionize.

The NLRB action can only accelerate a trend that's alreadystrong among practicing physicians. "The Boston Medical Centerdecision is like the Berlin Wall coming down," says FP JamesD. Vandermeer, co-president of a physician union formed in 1998at Seattle-based Medalia HealthCare. "You're going to seea lot of changes as people realize, 'Yes, it can happen.'"

In fact, it's happening already. Union membership among doctorshas increased from as few as 14,000 in mid-1997 to some 45,000in late 1999, according to AMA estimates. (See "The Big Five unions" for a list of the largest physician unions.)

The increase includes not only public-sector doctors—suchas the physicians employed by Los Angeles county who voted tounionize in May 1999—but private-sector doctors, as well. Injust the past few years, physicians have formed collective bargainingunits at Medalia; Thomas-Davis Medical Centers in Tucson; AtlanticShores Healthcare in Pembroke Pines, FL; and Medical West Associatesin Springfield, MA. Other nascent unions, such as the RockfordPhysicians' Council of Rockford, IL, withdrew petitions for certificationafter administrators conceded to some of their demands.

In addition, a substantial number of new union physicians areindependent doctors who have joined for reasons besides collectivebargaining. Indeed, 40 percent of the members of the Oakland,CA-based Union of American Physicians and Dentists are independent,according to Executive Director Gary Robinson. Some independentshave also joined unions in hopes that the NLRB will rule thatthey're de facto employees of insurers and thus eligible to joinor form a collective bargaining unit. For instance, a number ofNew Jersey physicians tried that strategy— unsuccessfully—throughthe United Food and Commercial Workers Union in 1999.

Faced with a trend so strong, even the AMA joined the paradeafter the House of Delegates voted this past June to form a groupto help doctors with collective bargaining. As one delegate putit, "We must do something to make this association relevantfor the practicing physicians of the 21st century."

The result is Physicians for Responsible Negotiation, a unionfunded by the AMA but legally separate from it. PRN officiallycame into being in November. "The House of Delegates wantedan organization that was not affected by the image of what a traditionalunion represents," says Todd Vande Hey, a member of PRN'sboard. "We don't even like using the word 'union' in connectionwith PRN."

A key PRN tenet is its commitment never to strike. The AMAconsiders withholding of medical care a violation of medical ethics.PRN is the only multistate physician union to rule out strikes.

PRN will not actively seek physicians to organize. "Ourgoal is to address groups who come to us and need assistance intheir employment relationships," says Steve Ellwing, a memberof the AMA's private-sector advocacy staff. PRN will form a collectivebargaining unit for those groups if other negotiations fail.

Initially, PRN planned not to organize doctors employed byother doctors. But that position has since softened. The reason:Actual control of a group does not necessarily follow from nominalownership. "We'll decide on a case-by-case basis," saysEllwing.

The bottom line is that PRN offers a home to physicians whoare afraid that unions could taint their professional image. "Thealternative available to physicians so far has been a traditionallabor organization," says Vande Hey. "The House of Delegatesbelieves that has precluded a lot of employed physicians fromconsidering collective bargaining."

More employed doctors, more interest in unions

The surging interest in unionization isn't hard to explain.In 1997, 43 percent of post-residency, nonfederal doctors workedfor a salary, up from 33 percent in 1983. Even more telling, from1983 to 1997, the percentage of young physicians—those in practicefive years or fewer—who work for a paycheck rose from 37 to 65percent.

As employees, doctors can be subject to unfavorable administrativeactions ranging from the penny-pinching to the absurd. "Myfirst case was in a hospital where the physician voted doctorof the year was summarily dismissed and no one could understandwhy," says pediatrician Barry L. Liebowitz, president ofthe National Doctors Alliance, a 15,000-physician union basedin New York City. "He'd sold his car to the chairman of thehospital board, and the car died a week later. So, in revenge,the chairman dismissed him.

"We got him his job back, and he became doctor of theyear again the next year."

Among private-sector physicians, unionization is still comparativelynew. But where unions have formed, they've generally brought benefitsto their doctors.

Medical West's union came into being because Blue Cross BlueShield of Massachusetts, which owned the Medical West clinicsin and around Springfield, decided to sell them without consultingthe doctors. The union got the doctors a seat at the negotiatingtable.

At Medalia, the union drive itself halted changes to the doctors'contracts and blocked a pay cut that had already been announced."Federal law prohibits changing the terms of employment onceyou begin to organize," Vandermeer explains. "That alonewas worth it to a lot of doctors."

He adds drily, "The administration doesn't ignore us anymore."

After the original union—Northwest Physicians Alliance—wasformed, Medalia split into three divisions, and the union splitalong with it. Medalia closed clinics in two of the divisions.The third division, in which Vandermeer practices, has been moreprosperous. "Our union has been quiescent lately, becauseour administration has turned some things around," says Vandermeer."They actually gave us a pay raise in July."

In November, however, the situation changed when administratorsannounced operating losses and presented them to physicians interms of "subsidies per provider"—a figure they derivedby dividing the loss by the number of doctors employed. "Theyreprised a tactic that goaded us to organize before—balancingthe books with physician pay cuts," says Vandermeer. "Naturally,interest in collective bargaining is rebounding, too."

Unions have also taken up issues for independent doctors. Inearly 1999, the Union of American Physicians and Dentists suedthe Medical Board of California over its decision to put doctors'home addresses on the Web. The lower courts supported the medicalboard, but the UAPD has appealed. Meanwhile, on the opposite coast,the Jacksonville-based Florida Physicians Union is preparing an"insurer report card" based on a physician survey thatwill rate insurers on their promptness in payment, their tendencyto downcode, and so forth. At least two unions, UAPD and the Federationof Physicians and Dentists, bring patients to member physiciansthrough union IPAs. FPD contracts with other, nonphysician unionsonly, while UAPD contracts with a broader range of organizations.

"There's no doubt that unions help doctors," saysVandermeer. "They're one of the weapons in our armamentariumfor taking back some of the power from the money counters whohave invaded the temple of medicine."

Not all employed doctors agree that physician unions are worthwhile,however. Here are some areas of concern:

• Employment contracts. If a union represents the physicians where you're employed, you're subject to the union contract whether you're a member or not. But you can still negotiate your own separate agreement to supplement the union contract. (In the unlikely event that the two contracts conflict, the individual contract prevails.)
• Who's in your bargaining unit. It's possible that you could end up in the same unit with nonprofessional employees. But you'll avoid that if a majority of your colleagues vote to have a separate professionals' union.
• Mandatory dues. In the 22 "right to work" states, you can't be forced to join a union. In states where "closed shops" are legal, however, you may have to pay the union's initiation fee and dues. There's a distinction, however, between this "core financial membership" and true membership. A core financial membership does not bind you to follow union rules.
• Strikes. The National Labor Relations Act specifically gives union members the right not to strike. However, if you are a true union member (as opposed to a core financial member), the union can discipline you. "Typically you'll be fined the same amount of money you'd make on the day you crossed the picket lines," says Mark G. Flaherty of Kansas City, MO, the AMA's outside labor counsel.

Among the wrinkles to be ironed out: defining who's eligibleto join

Any employed physician may be eligible to bargain collectivelythrough a union.

At least, that's what the law says. In practice, things aren'tso simple, because labor regulations are full of potholes, loopholes,and slippery passages. If you get a 1099 form, you probably aren'teligible—yet. If you get a W-2, you may be eligible now.

The Boston Medical Center case cleared up one eligibility snarl.Post-residency physicians who work for acute care hospitals cangenerally join unions whether the hospitals are privately or publiclyfunded. But until the recent ruling, medical interns, residents,and fellows could join unions only if they worked for a publicentity, such as a municipal or state hospital. In private institutions,they were considered students rather than employees.

Other snarls remain. For instance, under the National LaborRelations Act, supervisors are ineligible to join unions. Thus,employed physicians' scope of responsibility can be their singlebiggest hurdle to union membership.

The act says that a supervisor has the authority to "hire,transfer, suspend, lay off, recall, promote, discharge, assign,reward, or discipline other employees, or responsibly to directthem . . . or effectively to recommend such action . . . usingindependent judgment."

So it's not just your relationship to other employees thatdetermines whether you're a supervisor. If you're involved insetting employment policies, or even if you are regularly calledupon to approve such decisions, you're considered a supervisor.Thus, employers may argue that its physicians are supervisorsbecause they serve on a variety of employer committees—even ifthe committees address only professional quality-of-care issues.

For independent physician practices, the rules are much clearer:They cannot band together to negotiate with an insurer, period.But that may change if doctors can convince the NLRB that theyare de facto employees of insurers they contract with. A doctoris an employee, the argument runs, if an insurer provides a highenough percentage of practice revenues to have the clout to influencethe doctor's decisions.

So far, the argument hasn't been fully tested with the NLRB.A recent case in New Jersey proved a near miss, because the doctorsinvolved derived only a small proportion of their revenues fromthe insurer, AmeriHealth HMO, which held about 10 percent of thelocal market.

On appeal, the national NLRB affirmed the regional decisionagainst the doctors, but noted: "We are not necessarily precludinga finding that physicians under contract to health maintenanceorganizations may, in other circumstances, be found to be statutoryemployees."

"What the board is basically saying," says NLRB attorneyDavid Leach of New York, "is that if you give us a differentcase, we'll give you a different decision."

As an alternative to unions, independent physician are askingstate legislatures to relax federal antitrust strictures (statescan do so under a legal theory called the "state action doctrine").Only Washington and Texas have such laws on the books, and they'relimited in scope.

Washington's law doesn't allow negotiation over fees, nor doesit require insurers to bargain jointly with physicians. In fact,insurers in the state have simply refused to do so. And Texas'law is so restrictive that more than one commentator has calledit "toothless." The law allows for competing physicianswho make up no more than 10 percent of those in a health plan'sservice area to negotiate with the health plan jointly througha representative. That's a small percentage compared with theFederal Trade Commission's stance on IPAs. The FTC says that ifpractices in an IPA share substantial financial risk, they cancomprise up to 20 percent of the doctors in each specialty withina region—30 percent if the IPA bargains with more than one insurer—beforethe FTC will even scrutinize it for antitrust violations.

Nevertheless, laws addressing joint negotiation are under developmentnationwide. "It's safe to say that there are at least a dozenmore states that will be considering similar legislation in the2000 session," says Rebecca A. Cerny, the AMA's directorof state legislation.

The tactics employers use to thwart unions

Physicians' employers are watching the union movement closely,and are increasingly tapping labor lawyers for advice on how tohead off organizing on their premises. Four common strategies:

Tossing a few bones. The most basic tenet of union avoidance,wrote San Francisco labor lawyer John H. Douglas in the September1999 Group Practice Journal, is giving employees "Whateverit is they believe a union can secure for them . . . subject tothe constraints of a competitive marketplace."

Take the physicians of Rockford Health System in Rockford,IL. There, broad support among doctors for the Rockford Physicians'Council, which attempted to form a union in 1997, faded beforethe NLRB could certify the RPC as a bargaining unit.

"The administration revamped the management structureand purported to put more physicians in positions of decision-making,"says Doug Kaplan, an ophthalmologist who remains the presidentof the RPC. "They also canceled the compensation decreasethat was scheduled, and they gave us back the withholds that theywere not going to give back.

"That caused many physicians to think that the administrationwas sincere. So they wanted to wait and see what happened."

What happened was that in 1999, administrators announced thatthey would terminate doctors' contracts in 90 days and then rehirethe physicians under a renegotiated contract that, for many, involveda cut in pay. Some 20 doctors have reportedly refused to sign.

Arguing that doctors are supervisors. Employers, includingthe administrators at Rockford and Thomas-Davis Medical Centers,have regularly fought doctors' right to unionize by arguing thatsupervisory duties make them ineligible.

Philadelphia labor lawyer Jeffrey L. Braff often advises employersto prepare to use this strategy well before employees even starttalking union. "If an employer wants to keep people out onthe theory they're supervisors, we'll make sure the employeeshave some supervisory responsibilities," he says. "We'llmake sure they have authority to hire and fire and that they cangive discipline or recommend it."

Making the doctors part of a larger group. "Theconventional wisdom is that it is harder for a union to organizea large group than a small one," says Braff. "So employerswill argue that the unit for the election should be as large aspossible. For example, if employees work at more than one facilitywithin the same entity, employers will try to establish that theemployees at all facilities share a very broad community of interestand should be included in the bargaining unit."

Fighting till someone drops. Administrators can alsolaunch a battle of attrition, introducing legal obstacles in hopesthat doctors will give up. FPA Medical Management took this approachwhen Thomas-Davis doctors unionized in 1997, filing a series ofmotions and appeals to make it clear that it would negotiate withthe union only if forced. Thomas-Davis has since dissolved asa result of FPA's bankruptcy. (See "How FPA's implosion buried its doctors," Jan.25, 1999.)

In Seattle, after Medalia HealthCare had split in three, administratorsof the health system's northwestern region petitioned the NLRBto declare that Northwest Physicians Alliance no longer representedthe region's doctors. Administrators later withdrew the petition.

An extended slugfest also took place at Rockford Health System."They fought us every step of the way," says FP FrankJ. Nicolosi, who actively supported unionization.

Indeed, the NLRB moved the site of its certification hearingsfrom Rockford to NLRB regional headquarters in Peoria becausethey were proving so lengthy. The prospect of a 285-mile roundtrip to Peoria softened the resolve of doctors who weren't completelysure they wanted to join a union, and support for certificationmelted.

The legal expense of such wars of attrition is one strong reasonwhy would-be physician bargaining units often opt to join a largerunion.

The Big Five unions

Nascent physician unions often join a larger union to get thebenefit of its experience—not to mention the help of its lawyers.There are five multistate physician unions, four of which areindirectly affiliated with the AFL-CIO; the fifth is the AMA'sPhysicians for Responsible Negotiation.

• The National Doctors Alliance, based in New York City, is an umbrella group for three unions that together comprise 15,000 members: the Committee of Interns and Residents, which pursued the Boston Medical Center case described in the accompanying article; the Doctors Council, which largely represents physicians in the New York City area; and United Salaried Physicians and Dentists. For more information, see www.ndaseiu.com or phone 212-532-7690 (Doctors Council) or 212-725-5500 (Committee of Interns and Residents).
• The Federation of Physicians and Dentists, which numbers 8,500 physicians, is based in Tallahassee, FL. The Thomas-Davis union was part of the FPD. See www.fpdunion.org, or call 850-942-6636.
• The Union of American Physicians and Dentists, formed in 1972, has about 5,500 members, 80 percent of whom practice in California. See www.uapd.com or call 510-839-0193.
• The Office and Professional Employees International Union's physician organization, the National Guild for Medical Professionals, signs up doctors in private practice only, and does so only through medical societies. While OPEIU does represent physicians in collective bargaining, its focus is legislative. See www.opeiu.org or call 800-346-7348.
• Physicians for Responsible Negotiation, the AMA-sponsored union, offers advice for physician groups and will also form collective bargaining units. Existing collective bargaining units can join PRN, but only by petitioning for decertification by their current unions, waiting a year, and then petitioning for recertification under PRN. See www.4prn.org or call 312-464-4PRN.

. Doctor unions: Time to join the parade?.

Medical Economics

2000;2:76.