Physicians aren't waiting to see whether Congress will pass a law allowing them to collectively negotiate with health plans--they've taken their fight to the states.
Medical associations have worked with lawmakers to introduce bills in 17 states and the District of Columbia allowing individual physicians to bypass antitrust laws and band together to negotiate rates with health plans.
So far, Texas and Washington state are the only states that allow physicians to collectively negotiate with health plans.
Texas' attorney general is reviewing public comments before issuing final regulations for the law. A spokeswoman for the attorney general says it's unknown when the final draft of the regulations will be published. Because the rules aren't finalized, physicians have yet to use the law, which was passed in June and took effect in September.
In Washington, physicians in 1993 got the right to negotiate terms and conditions of contracts with health plans--but not rates, says Tom Curry, CEO of the Washington State Medical Association. Health plans aren't required to negotiate with doctors. The medical association has twice been involved in attempts to negotiate terms with major insurers. Curry says the first effort was somewhat successful and the second time required the involvement of the insurance commissioner for resolution.
Congress is debating a bill proposed by Rep. Tom Campbell (R-Calif.) that would exempt physicians from antitrust laws that prevent collective bargaining. The House Judiciary Committee late last month OK'd the bill by a 26-2 vote, although given the current political realities the chance of healthcare legislation passing Congress is questionable.
Arguments at the state and national levels are the same: Those who favor the bills say health plans wield too much power and low reimbursement rates are driving physicians out of business. They argue the bills would finally give physicians the leverage they need to protect their practices and their patients.
"A very significant percent of your financial (success) depends on each of the health plans," says Brian Greenberg, M.D., a pediatrician in Tarzana, Calif. The California Senate is considering a physician negotiation bill.
"If they send you a contract, and the contract is egregious . . . your option is to sign it or not to sign it. The concept of negotiating a contract doesn't exist. They know 20% to 30% of your business depends on them."
Those against the proposals argue the bills would raise healthcare costs, most of which would be borne by patients. They also say giving physicians an exemption violates antitrust laws.
"They're basically asking to be given the exemption around federal antitrust laws," says Bobby Pena, spokesman for the California Association of Health Plans. "The laws were never set up to protect health plans or businesses. They are set up to protect consumers . . . If they start tearing down barriers to protecting consumers, they have to have good reasons. We don't think allowing physicians to fix prices is a good enough reason."
The bills have brought a debate over not only whom those bills would benefit but whether they violate the intended meaning of labor exemption laws passed in the 1930s.
"To allow physicians joint negotiation is inconsistent with the principles of antitrust laws," says William Kopit, an antitrust attorney with Epstein Becker & Green in Washington.
In the 1930s, wealthy owners of huge companies did not share profits with employees.
"And so Congress, in its wisdom, thought it would be appropriate to give the workers more and the owners less," Kopit says. "It certainly was designed consciously, if not analytically, as a wealth transfer to give workers more and employers less."
Taking that public policy history and mind-set into account, using that law to allow physicians to negotiate wouldn't be appropriate, he says. Further, he says, the insurers don't have the "equivalent of monopoly rents" from providers.
"Even though (physicians are not) doing as well as they were 15 years ago, they're still doing well. They're not starving," Kopit says. "How many people who claim to be supporters of the bill are really prepared for the wealth transfer from consumers to providers? . . . In 1930, it was perfectly appropriate to support a wealth transfer from the bosses or owners to the workers. To support a wealth transfer to the doctors today is more problematic."
The Congressional Budget Office estimated that passage of the Campbell bill would raise the cost of several federal health plans--including Federal Employees Health Benefits Program, Medicaid and the State Children's Health Insurance Program--by $165 million in 2001 and by $11.3 billion over 10 years.
The CBO estimated that one-third of the country's 400,000 physicians would be eligible to form coalitions. The new coalitions would raise fees an average of 15%. The CBO further estimated that under the bill about 40% of physicians would be union or coalition members by 2006.
Antitrust law dictates that buyers and sellers are supposed to compete with each other, says Kevin Arquit, an antitrust attorney with Clifford Chance Rogers & Wells in New York.
"To someone like me, an antitrust lawyer who's not in healthcare . . . this is classic special-interest legislation intended to favor one particular group," Arquit says. "It's no different than if a group of retailers asked for legislation to collectively impose terms on suppliers of furniture or car (manufacturers).
"It's all about getting prices higher," Arquit says. "It's designed as a wealth transfer from consumers to doctors . . . You can use all the lofty language you want. It's all about doctors having more money put in their pockets at the expense of consumers."
Michael Ile, general counsel for the AMA, disagrees. While some studies show healthcare costs would increase, the bills would give state officials authority to regulate the bargaining and solve problems that occur, Ile says.
"It's a wonderful experiment. It will test some of the ideas, the concerns expressed about the Campbell bill that physicians will boycott health plans and raise prices, which we don't think will happen," he says. "I've heard that this is nothing more than allowing the fox access to the chicken coop. I don't see evidence of that. Let's look at the facts and not theories . . . We don't think physicians should have the ability to dictate terms to payers, patients or anyone else. Neither should payers. We should have a process that is fair, that is equitable."
Ile says there are no guarantees that the bills would either violate or stay within the antitrust laws. The inability of physicians to negotiate with payers is a problem, he says.
Ile says, "A lot of harm has come to patients and the ability of physicians to treat them."
Pediatrician Greenberg says there are significant quality of care issues such as which specialists will see patients, something that could be included in a negotiated contract.
"There's almost zero competition between the suppliers of and the financiers of healthcare," he says. "There's not a transfer of wealth. It would be a transfer of power from the health plans to the people who provide the healthcare, which probably is not a bad idea."
In the Los Angeles area, about 55% of patients are in managed care plans, the CAHP says. Greenberg says that means low reimbursement negatively affects providers' bottom line.
"The health plans have taken the attitude that 'Here is your contract, sign it or don't sign it.' What, essentially, has happened in California in particular is . . . you have a small number of health plans that control the market where people that supply services, doctors, are unable to do anything collectively."
In states such as California, the ability to negotiate prices already exists through IPAs and medical groups, Pena says. Besides, he says, allowing collective negotiations will raise rates. The argument that allowing negotiations would improve quality isn't sound, Pena says.
"I don't think or ever assume or fantasize that (OPEC) would get together to talk about anything but price. It's not to (discuss) better ways to get more energy-efficient cars. They talk about price. That's what physicians are going to talk about."