Legal Corner
Collective Bargaining
Richard E. Moses, DO, JD pharmacy chains, health insurers, and employers. In addition, younger professionals coming out of training are taking jobs with healthcare systems and private equity owned and controlled medical practices.
@therealgidoc
Collective bargaining is a
process of negotiation between an employer and a group of employees with the goal of regulating salaries, working conditions, benefits, and other rights for the workers. A trade union, to which the employee belongs, usually represents employees. The union negotiates with a single employer or entity to reach an agreement, encompassing the entire compensation package. Physician interest in collective bargaining is nothing new. It dates to the 1970s in response to changing physician reimbursement and large health organizations coming onto the healthcare scene. Organized medicine has historically frowned upon physician unions as antithetical to professional values. This trend may be softening as the U.S. health system continues to evolve, consolidating with hospital mergers and acquisitions resulting in mammoth health systems, large
Prior to discussing collective bargaining, we need to make note of the complex antitrust laws in the United States. Congress passed the first antitrust law, the Sherman Act, in 1890 as a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.” In 1914, Congress passed two additional antitrust laws: The Federal Trade Commission Act, which created the FTC, and the Clayton Act. With some revisions, these are the three-core federal antitrust laws still in effect today. The antitrust laws proscribe unlawful mergers and business practices in general terms, leaving courts to decide which ones are illegal based on the facts of each case. Courts have applied the antitrust laws to changing markets for the past 130 years. Despite the passage of time, the antitrust laws still have the same basic objective: protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality up. I have entertained many conversations over the years with physician colleagues eager to “unionize” for sundry reasons, usually in response to their frustrations. My response to their query has been standard, in that the basic
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principles of both federal and state antitrust and labor laws affect the ability of physicians to collectively bargain. The National Labor Relations Act of 1935 (NLRA) was designed to protect employees from the power of their employer by providing a “labor exemption” from antitrust laws. “Employee” includes physicians but excludes independent contractors (self-employed) and persons exercising managerial or supervisory responsibilities. This is what has caused the problem and challenge with physician unionization, in that historically most medical practices were self-employed “ma and pa” practices. In addition, many employed physicians have supervisory or managerial roles, thereby excluding them from NLRA protections. Collective bargaining with private insurance companies has been unsuccessful for self-employed physicians. The Sherman Antitrust Act of 1890 regulates these attempts. The theory is that a competitive marketplace promotes competition and lowers costs, therefore benefitting consumers. The watermark case is U.S. v. Maricopa County Medical Society, 452 U.S. 223 (1982), where the U.S. Supreme Court held that when physicians negotiate collectively with insurers about fees and related matters and therefore do not compete with each other on price, this results in a horizontal agreement among competitors to price fix. (NB: “Horizontal restraints” between similar economic entities directly competing, physician groups in our case, at the same level is believed to limit competition).
