Perspective: Three Leaders Analyze Physician Unions’ Potential

Thirty years ago, when the vast majority of U.S. physicians worked in independent, often smaller-sized, medical practices, largely for fee-for-service payment, the idea of physician unions would have seemed outlandish to many people in healthcare. But the landscape has changed dramatically since then, and large numbers of physicians are now salaried by hospitals, health systems, medical groups, and health plans. So the question is no longer abstract, or strange.

And now, a team of two attorneys and one physician have authored an article published in the JAMA Network online, in which they analyze some of the elements and complexities of unionization, while making it clear that they believe that unionization may be a useful tool for certain groups of doctors.

In the article by Daniel Bowling, III, J.D., Barak D. Richman, J.D., Ph.D., and Kevin A. Schulman, M.D., entitled “The Rise and Potential of Physician Unions,” those three experts offer a nuanced view of the issues involved. Bowling is a professor at Duke University School of Law (Durham, N.C.); Richman is in the clClincial Excellence Research United in the School of Medicine at Stanford University (Stanford, California), and is also a professor at Duke University Law School; and Schulman is in both the Clinical Excellence Research Unit in the school of Medicine at Stanford, and in the graduate School of Business at Stanford University.

The three experts write that “The consolidation of hospital systems and physician practices under a single corporate umbrella has resulted in major structural changes to the practice of medicine. In 2012, 60% of practices in the US were physician-owned, 23.4% of practices had some hospital ownership, and only 5.6% of physicians were direct hospital employees.1 After a surge in acquisitions of physician practices over the decade, and in response to the COVID-19 pandemic, the fraction of physicians employed by hospitals or health systems reached 52.1% and 21.8% by other corporate entities in 2022, for a total of an estimated 74% of practicing physicians.2 Many physicians now are employed by consolidated corporate health care systems that span many different communities and increasingly are spread across multiple states.”

And, they write, “This rapid transformation has largely followed an aggressive strategy, put forward by hospital and corporate leadership, that seeks scale and exploits market power. However, it is also a strategy that is increasingly at odds with the interests of the physicians working in these organizations. The strategic differences are revealed in a variety of important policy differences, spanning from payer contracting strategies, compensation incentive structures, and service line prioritization. These differences suggest the potential for growing challenges for US medicine.”

The three experts see three key elements that physicians must consider if they’re considering forming a union. “First,” they write, “physicians need to determine whether collective bargaining is in their interest, in contrast to each physician contracting individually for their services. If collective bargaining is seen as advantageous, physicians need to determine who the union represents: all physicians within a system or only those at a specific hospital? All physicians across specialties or only specific departments? This latter concern reflects the potential challenge when different clinicians have different compensation and governance interests within a single organization.”

Then, physicians need to consider whether collective bargaining for salary makes sense. What if primary care physicians and specialists join the same union to negotiate with a hospital in a fee-for-service payment model, but then decide to strategize separately when working under a capitated payment model? The potential complexities could be many.

Meanwhile, they write, “Third, and most critically, physicians should consider the benefits of collective mobilization to shape hospital policies. Collective bargaining can help address strategic issues that are of great interest to employees, such as in 2022 when nurses at Sutter Health went on strike over staffing shortages and access to adequate personal protective equipment.9 Policies related to the practice of medicine may benefit from explicit consideration through collective bargaining. Physicians and hospital managers might disagree over patient discharge policies, documentation standards, quality improvement programs, and requirements for after-visit services.”

Importantly, they write, “Unions are not a panacea. They are a tool available to certain physician employees and can be sought as a response to growing tensions within large hospital systems. However, they may not provide as much leverage for input into strategy as physician-led organizational structures such as physician-owned practices or other professional corporation models.” Still, they note, “While there are some concerns that unionization might harm patient care by interfering with the patient-physician relationship, it is important to recognize that many business strategies of consolidated health care systems are also potentially harmful to patients, and that unionization might be a lever that physicians can use to push back against those potential harms.”

Thus, in the end, they experts believe, the working conditions evolving forward in health systems, will inevitably bring the union discussion to the fore time and time again. “Conflicts between physicians and hospital leaders over governance, compensation, work rules, and strategy will likely lead to an increased likelihood of discussions of physician unions as a response,” they conclude. “While unions offer benefits compared with individually negotiated employment agreements, they may be limited in their ability to address the higher governance concerns of the profession.”

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