Seattle's Medalia HealthCare, created three years ago as a "completely physician-driven medical group," is in the throes of a union drive by doctors who say they've lost control.
The 260-physician primary-care group, with 48 sites throughout Puget Sound, is owned by Sisters of Providence Health System, Seattle, and Tacoma, Wash.-based Franciscan Health System, which is part of Catholic Health Initiatives-West.
The doctors formed a local chapter of the New York-based United Salaried Physicians and Dentists, called the Northwest Physicians' Alliance, which has petitioned to represent them.
Collective bargaining by physicians employed at private hospital systems is rare, but that could change.
There are at least three ongoing efforts to organize physicians at private hospitals or integrated delivery systems, Medalia being the largest.
Historically, unions have represented mainly residents, interns and publicly employed physicians. More recently, private practitioners have sought union assistance in negotiating with managed-care plans (Oct. 6, 1997, p. 99).
In Illinois, 170 physicians employed by Rockford (Ill.) Health System are seeking a union certification election with legal assistance from the American Medical Association.
The AMA said it has fielded inquiries about collective bargaining from disgruntled physicians at three other integrated delivery systems. Typically, the doctors sold their practices to large systems, which then attempted to cut costs, according to AMA staff.
In New York, 190 physicians employed by 458-bed St. Barnabas Hospital in the Bronx have petitioned for representation by the USPD, an affiliate of the Service Employees International Union. The physicians work at a city-owned hospital, Lincoln Medical and Mental Health Center.
"The common denominator is outright disrespect," said Jeffrey Rugg, director of organizing at the USPD. "Doctors feel they've lost their voice in whatever healthcare system they're in."
In legal papers, Medalia management said it has stuck to its original vision of a decentralized corporate structure in which physicians were to be paired with administrators and given a voice in all decisions.
But rank-and-file physicians say the administration implemented changes that affected patient care without their advice.
"The system was set up with the idea of being physician driven, and they just didn't do it," Rugg said.
For example, he said, Medalia's executive committee rejected recommendations of a physician advisory committee on compensation. He cited testimony from a National Labor Relations Board hearing earlier this year in which a medical director called the advisory committee's recommendations "blatantly stupid" and "incredibly ludicrous."
In a written statement, a 22-doctor union-organizing committee said many physicians and other staff had left or were considering leaving Medalia because their ability to provide quality care "has been handicapped."
"Through collective bargaining we will participate in the management of our clinics," the letter said.
Medalia Chief Medical Officer James Bales, M.D., said about 15 more physicians than expected have resigned in the past six months. He said some physicians had unrealistic expectations about selling their practices and becoming employees.
"Any time you go from a few mom-and-pop operations and throw everybody together into one huge organization, there are expectations that things may stay the same, and they don't," he said.
Bales said the existence of a union could make it even more difficult to come up with a compensation system that will promote productivity. "Witness what we've done already, and nobody is happy with it," he said.
But Bales also acknowledged that bureaucracy delayed follow-through on decisions made at the clinic level. "If there was a management error, that was it: to centralize too many (functions)," he said.
In addition, he conceded that communications with physicians could have been better, although he said he was not aware of the medical director's testimony cited by Rugg.
Medalia has refused to recognize the union, saying physicians and optometrists are supervisors or managerial employees and therefore are exempt from coverage under the National Labor Relations Act.
The union believes 210 Medalia doctors are nonmanagers and therefore are eligible to bargain collectively. "These doctors have employment contracts that say very clearly, `You are an employee. You will be told where you work. You will be told what your compensation is,' ' Rugg said.
The NLRB's regional director in Seattle is expected to render a decision on management's objections as early as this week, following a seven-week hearing.
Similar arguments have been made by the hospitals in Illinois and New York, where hearings are under way this spring before NLRB regional directors.
Physician organizers are confident they will prevail. An NLRB regional director rejected the argument that physicians are managers last year in the case of Thomas-Davis Medical Center in Tucson, Ariz., a medical group operated by FPA Medical Management, a San Diego-based physician practice management company. The regional director's decision was upheld by the NLRB in the District of Columbia.
A decision in favor of Medalia physicians would clear the way for a vote as early as May, although an appeal by management could force the results to be sealed. Late last month, Medalia management failed in a motion to transfer the case to the NLRB in the District of Columbia.
Meanwhile, Bales said major steps are under way to improve operations. This week Medalia welcomes a new chief executive officer, Derick Pasternak, M.D., former CEO of Albuquerque-based Lovelace Health Systems, who will head the re-engineering effort.