By Christopher Guadagnino, Ph.D.

The Pa. delegation at the June, 1999 meeting of the AMA House of Delegates

Published September 1999

• Board of Trustees report

• Reference Committee report

OTHER COVERAGE OF PHYSICIAN UNIONS

• Physician unions propagate in Pa.

• Physician unions take root in Pa.

• Physicians seek antitrust waiver

• Surgeons fight Blue Cross rate cuts

• Medical society explores regionalization and MD unions

• Legal issues of physician unionization

• Physician unions gain steam

• AMA collective bargaining program

• A Pennsylvania physician guild

• Building a physician union in the Delaware Valley

• The legalities of physician unions

• Prospect of physician unions in Pa.

• React to this article in the Discussion Forum.

That was the moment when the AMA’s House of Delegates voted at its June 1999 annual meeting to form a national labor organization, as portrayed by the AMA’s Organized Medical Staff Section Chair, Robert J. Weierman M.D.

A great deal has been made about the AMA’s vote, ranging from those who view the decision as marking the zenith of physicians’ resolve to stand up to managed care company abuses to those who believe that the ethos of the medical profession is imperiled by associating itself with the working-class interest politics of labor unions. Physicians who played key roles in the affair agree that the vote’s significance was largely symbolic in that it registered the level of physician frustration in a way never before seen.

Prelude to the Vote

In June of 1998, Weierman’s Organized Medical Staff Section (OMSS) sent a resolution to the AMA House of Delegates urging the AMA to form a collective bargaining unit. When one of the resolution’s prime movers, AMA General Counsel Edward B. Hirshfeld, passed away last August, the issue was put on the back burner, says Weierman.

The OMSS then spearheaded a coalition comprised of the AMA’s Young Physicians Section, Resident and Fellow Physicians Section, Medical Student Section and International Medical Graduates Section that, at an AMA meeting last December, ultimately induced the House of Delegates to send to the Board of Trustees a resolution with the charge to develop a national labor organization, not aligned with national trade unions, that would level the playing field with managed care companies.

Despite having conducted two AMA membership surveys, each of which showed 75 percent of members supportive of the resolution, the Board of Trustees voted not to form or sponsor any labor organization.

"The Board acted on its own values, knowledge and will, not responding to concerns of political appropriateness," says AMA Chairman and President-elect Randolph D. Smoak, M.D. "The Board members who voted against [the resolution to form a labor organization] recognized that the House still very likely would pass it."

The majority of the Board believed it was up against a task which it could not accomplish, says Smoak, emphasizing that antitrust laws still preclude the vast majority of physicians from collective bargaining under the National Labor Relations Act (NLRA).

In April, the Board released an impressively detailed set of recommendations and rationales for opposing an AMA-sponsored labor organization (Report 30 of the Board of Trustees, A-99). The report gave a detailed break-down, using 1998 data, of the physician population that would be eligible under federal law to engage in collective bargaining, i.e., those employed in non-supervisory capacities.

A total of 135,144 of the nation’s 620,876 physicians engaged in patient care activities, the report noted, are post-resident physicians employed by institutions, divided almost equally among four clusters: hospitals; medical schools and universities; HMOs, state and local government and ambulatory sites; and other employers. Approximately 20 percent of those employed physicians are in supervisory positions. Another 47,731 physicians are employed by physician-owned group practices, which AMA policy precludes from representing in AMA-sponsored collective bargaining units.

The remaining total of approximately 60,400 U.S. physicians eligible for AMA-sponsored collective bargaining is augmented by eligible resident and fellow physicians. Although the National Labor Relations Board currently deems them to be students rather than employees, and therefore ineligible for collective bargaining under federal law, the report notes that some states, e.g., New York, New Jersey, California, Florida and Massachusetts, have their own labor laws that allow employees of public institutions—such as municipal or state hospitals—to bargain collectively outside of NLRB oversight. The report notes that there are some 10,000 resident physicians nationwide who are currently members of unions and adds that there is renewed interest in unions among residents. Nevertheless, resident physicians in states without the public employee exemption, including Pennsylvania, continue to be ineligible for collective bargaining, as are resident physicians at private teaching hospitals in every state.

The AMA Board felt it could not comply with the House’s request to develop a negotiating unit within organized medicine with the expectation of leveling the playing field for physicians with health plans, according to Smoak. "Only one in seven physicians qualify," he points out. "Should we put the entire organization in jeopardy for a small minority?" The perception of physicians’ and the AMA’s professionalism would be jeopardized, Smoak says, as it would be difficult for a collective bargaining unit always to put patient care concerns ahead of self interest, regardless of the sincerity of its intent.

"Even though we said, ‘No strike,’ once you start down the slippery slope of any labor organization, you risk a loss of professionalism in the eyes of the public," he adds. There is no guarantee that you won’t see striking become part of an AMA labor organization, or that it won’t affiliate with other labor organizations in the future, Smoak warns, as an AMA-affiliated bargaining unit is free after five years to elect its own Board and to change its bylaws.

According to projections in the Board’s report, only ten AMA-affiliated collective bargaining units for physicians and 25 units for resident physicians would be formed in the first five years, covering an estimated 2000 employed physicians and 10,500 residents, a total falling short of a critical mass or impact necessary to warrant the risk and cost of the effort.

Another concern expressed by the Board was that HCFA might interpret widespread collective bargaining by residents as evidence that residents are employees rather than students, thus justifying further reductions in graduate medical education support.

The Board reasoned that the AMA’s inexperience in collective bargaining, coupled with its no-strike policy, would put it at a competitive disadvantage with traditional labor organizations unfettered by such constraints.

Potential impact on the AMA’s membership, the Board said, was inconclusive, as possible attrition because of strong opposition to AMA collective bargaining by leadership in the academic community could be offset by new or renewed membership by reinvigorated residents and young physicians, or by even larger attrition among them if the AMA did not vote to form a labor organization.

Smoak acknowledges that the AMA has been on record for nearly ten years as saying that it is not inappropriate for physicians to form collective bargaining units, but says that the AMA has never promoted that policy. "Would we put millions of dollars to start up one? Probably not," he declares. It was an educational experience for the AMA, he says, when it advised employed physicians at the Rockford Memorial Health Services Corporation in Rockford, Illinois, who sought NLRB certification to form a collective bargaining unit, but later withdrew the petition after their employer made some changes in response to the organizing drive.

Instead of forming a labor organization, the AMA Board of Trustees recommended maximizing the use of tools that are currently available to all physicians, namely, pursuing the current AMA private sector advocacy program, actively supporting the formation of independent housestaff organizations and actively promoting the Campbell Bill (HR 1304), standing ready to assist self-employed physicians to bargain collectively with third party payors if it passes.

The Board’s report upset the OMSS Governing Council, notes Weierman, who sent an urgent memo to OMSS leadership to try to reverse the Board’s recommendation not to support the formation of a collective bargaining unit. The OMSS arranged a conference among the leadership of the Young Physicians Section, Resident and Fellow Physicians Section, Medical Student Section and International Medical Graduates Section that led to a consensus statement urging the House to develop and implement a national labor organization both for employed physicians and resident and fellow physicians and urging the Governing Councils of each section to lobby their state chairs and representatives.

That grassroots effort worked. The OMSS-led coalition won the support of state leadership, who in turn convinced their AMA delegations to get the labor organization resolutions on the table for a vote at the House of Delegates annual meeting.

A special committee (Reference Committee I) was set up exclusively for the labor organization issue, with seven members appointed by the AMA House speaker. The committee listened to nearly five uninterrupted hours of heated and emotional testimony from 119 persons on June 20 before drafting the final resolutions that were voted on by the full AMA membership on June 23, according to the committee’s Chairperson Edmund W. Jones, M.D. A great majority of that testimony was in favor of an AMA labor organization and the final report "was truly a reflection of the House of Delegates’ sentiments," Jones says.

The final resolutions drafted by Reference Committee I directed the AMA to:

• Immediately implement a national labor organization under the National Labor Relations Act to support the development and operation of local negotiating units as an option for employed physicians.

• Immediately implement a national labor organization for resident and fellow physicians who are authorized under state laws to collectively bargain.

• Continue to support the development of independent housestaff organizations for resident and fellow physicians and be prepared to implement a national labor organization to represent them should they be recognized as eligible for collective bargaining under the NLRA.

• Study the benefits and risks of forming collective bargaining units.

• Continue to vigorously support the Quality Health Care Coalition Act of 1999 (Campbell Bill) to seek antitrust relief for private physicians and pursue similar legislation if it is unsuccessful.

• Be prepared to immediately implement a national organization to support collective bargaining for private physicians should the Campbell Bill pass.

• Advance its private sector advocacy programs.

The Reference Committee’s final report rejected many of the Board of Trustees’ objections to adding collective bargaining to the AMA’s tool kit. It emphasized the need for vigorous assistance for physicians in leveling the playing field in the current practice environment, praising the AMA’s private sector advocacy program but arguing that more needs to be done, and quickly. Among the committee’s arguments were that:

• Professional responsibility of physicians to advocate for patients will be supported, not weakened, by the ability to bargain collectively and the ethical framework within which the AMA will proceed is a compelling safeguard.

• Many physicians want an alternative to traditional labor unions and will feel more comfortable with an AMA bargaining unit.

• Adding collective bargaining will not only broaden the range of tools the AMA can use to represent physicians, but will also strengthen the value of existing tools, allowing the AMA to extract major potential impact from relatively modest collective bargaining activity.

• Even if some physicians might be opposed to the AMA engaging in collective bargaining activity, those physicians who would find the service appropriate and valuable should have the option available to them.

• The risk of AMA-sponsored collective bargaining units changing governance structure and bylaws after five years is manageable and should not be a major impediment to providing physicians with a strongly desired advocacy tool.

• The risk of HCFA reducing medical education support if more resident physicians became involved in collective bargaining is contradicted by the 10,000 residents in New York State who currently do so and continue to receive the highest level of federal GME support.

The Vote

The day of the floor vote for these resolutions was not without intrigue, according to Jones: "Some strategized an event to emasculate our report by taking out the call to form a national labor organization. They knew they were underdogs. Microphones were well-positioned near delegations who were known to oppose those two resolutions. They did a good job of it—no supporter had a chance to get to the microphones for the first half-hour, after which the action really started."

At that point, Jones notes, supporters of the AMA labor organization became riled over the way the debate was being negatively shaped by opponents attempting to derail the issue. After three hours of debate a voice vote was taken. "It was obvious that the yeas had it," says Jones, yet opponents called for a hand vote, which Jones estimates to have been two to one in favor of the resolutions. Others, including Smoak, said that the vote was much closer.

Most of those who voted for the resolution, Jones adds, were self-employed physicians who will not directly benefit from an AMA labor organization at present. "There is no question that membership played a big role in driving this vote," says Weierman. "People who have belonged to the AMA for years said, ‘I’m quitting if the AMA doesn’t do something.’ If we had lost this, I don’t think there would have been an AMA in a couple of years," he adds.

As for the House rejecting the Board’s opposition to forming a labor organization, Weierman says, "We did this in December, where there was overwhelming support. I think the Board of Trustees made a big mistake by saying, ‘No, we’re not going to do this.’ I think they were told in no uncertain terms at this meeting, ‘You’re going to do it, now move on with it!’"

The vote has tremendous symbolic importance, according to Jones. "Physicians have put out their mark: ‘This is how important it is for us to help our patients.’ I hope its message will open the eyes of the public, insurance companies, government, business and the legislature," he says. A much more important goal than the outcome of this vote, Jones emphasizes, is to get Congress to pass the Campbell Bill.

Smoak agrees and believes that the vote will send a clear message to Congress that physicians have reached the zenith of their frustrations.

Role of AMA Labor Organization

The AMA vote does, in fact, have some immediate practical impact. For eligible physicians, membership in an NLRB-certified collective bargaining unit is important, first and foremost, because it requires the employers (hospitals, medical schools, HMOs, etc.) to bargain in good faith with the unit. AMA’s Report 30 (A-99) notes that the NLRA restricts the ways in which employers can attempt to block formation of a bargaining unit, such as forbidding firing, demoting or retaliating against the organizers. The report nevertheless cautions that recent physician organizing efforts have triggered vehement resistance from employers, including the hiring of consultants to try to discourage physician interest in organizing and using litigation to delay the effort, in some cases up to three years.

Although a detailed AMA action plan was unavailable at press time, Report 30 (A-99) noted that a preliminary constitution has been drafted to support an AMA-affiliated collective bargaining unit (CBU). AMA-sponsored CBUs would operate under the following parameters, according to the report:

• They would be established as a professional alternative to organized labor.

• All of its members and officers would follow the AMA’s principles of medical ethics and the opinions of the Council on Ethical and Judicial Affairs, including a provision not to strike or affiliate with non-physicians.

• Before resorting to formation of CBUs, physicians should first try to resolve grievances through assisted discussions with employers, committee structures, mediation or government reforms.

• So as not to represent physicians against physicians, the CBU would not organize physician-owned and -operated group practices.

• The AMA would appoint the CBU’s Board for the first five years, after which the CBU members would elect their own Board and be a legally distinct and separate entity from the AMA.

• The CBU’s members must not be required to be AMA members.

Among the issues that CBUs could address, the report noted, are:

• Physician governance role.

• Quality and patient care concerns.

• Equipment and technology needs.

• Productivity standards.

• Terms and conditions of employment.

• Hours.

• Compensation.

• Coverage.

• Clinical autonomy.

• Evaluation criteria.

Negotiating and bargaining tools available to the CBUs, consistent with the AMA Code of Medical Ethics, would include:

• Collective negotiation and bargaining.

• Free days of service to patients (to reduce revenue to employers without disrupting care).

• Informational pickets and public demonstrations.

• Unfair labor practice petitions.

• Lobbying and publicity campaigns.

• Shareholder advocacy (for publicly-traded entities).

AMA-affiliated CBUs for resident physicians would be subject to the same parameters and use a similar set of tools and tactics, focusing on a different set of issues, the report notes, including:

• Work hours (considering educational needs of residents and patient safety).

• Work environment issues.

• Relationships with faculty and administration.

• Fairness in evaluations.

• Grievance procedures.

• Productivity standards.

• Compensation.

• Closing of residency programs and facilities.

• Support staff.

• Equipment and technology needs.

As for possible future collaboration between the AMA and traditional labor unions, Weierman thinks the door should be left open in order to get experienced insights into collective bargaining. He adds a caution: "We’re a small cog in their big wheel and they would have to prove to us that they have our interests at heart."

Jones believes that ethical and professional problems, as well as strikes, rightly preclude the AMA from ever considering working with traditional labor unions, but observes that the process is now in gear and that it is impossible to predict what the AMA-sponsored bargaining units will need in five years, when AMA control is relinquished.

Smoak’s view on possible future collaboration: "I’m sure that we can learn from people who have been doing this for half a century, but we have no assurance that things we would have conflicts with would not come up in the future to bite us, so to speak. The AMA would not choose to do that."

Smoak acknowledges that the AMA’s CBUs will compete with those of organized labor, but emphasizes that "we’re not there to compete and garner a broader-based membership. Our effort is to be there to support physicians if they chose to do this, but we’re not going out and promoting negotiating organization membership."