Doctors' groups are confident that a new antitrust exemption approved last week by New Jersey lawmakers will help pave the way for national legislation allowing independent physicians to bargain collectively with health plans.
"We believe this is the single most critical issue in the survival of the medical profession in the United States," said Angelo Agro, M.D., an otolaryngologist who is president of the Medical Society of New Jersey. "It has been our primary legislative advocacy and legislative focus for the last two years. We hope that this law will be a trend throughout the nation."
The law gives doctors and dentists the right to share information about prices and to hire representatives to negotiate contracts with insurers.
An official with the American Medical Association, which has placed antitrust exemptions at the top of its list of legislative priorities, expressed optimism that the new law will help jump-start the group's national efforts in Congress.
"This is a step forward in leveling the playing field," said Donald Palmisano, M.D., a New Orleans surgeon and AMA board member. "We're not across the goal line yet, but this certainly helps. It shows that the discussion is taking place and legislators have deemed it a critical issue."
Signed last week by then-acting Gov. Donald DiFrancesco, New Jersey's law makes the Garden State only the third in the nation, along with Texas and Washington, to provide physicians with a special exemption from federal antitrust laws.
Despite what Agro said is a legislative breakthrough, the New Jersey law presents the same kind of restrictions that have rendered the 3-year-old Texas antitrust exemption all but useless to physicians.
The Texas law does not compel health plans to negotiate with physician coalitions. Blue Cross and Blue Shield of Texas took advantage of that loophole last year, refusing to negotiate with 11 physicians in rural Henderson, about 100 miles east of Dallas (Dec. 10, 2001, p. 31).
As a result of the costs and poor prospects for future negotiations, those physicians have abandoned their effort. The antitrust exemption has never been used in Washington.
As under the Texas law, New Jersey's attorney general must oversee negotiations between doctors and health plans, and HMOs will not be forced to participate, Agro said. Yet officials with the medical society say the new law "is considered the nation's strongest."
For example, the Texas law includes a provision that no more than 10% of the affected physicians in a region can band together and bargain collectively, Agro said. No such quota exists under the New Jersey law. What's more, he said, the state medical society has worked cooperatively with many of the health plans in the state and expects that a combination of public and governmental pressure will be enough to bring even the most reluctant HMOs to the bargaining table.
"We expect they will see the advantage of sitting down and talking with doctors," he said. "It becomes counterproductive, after a while, for HMOs to completely stonewall."
The AMA and state medical societies have faced steadfast opposition from insurers, who claim that an antitrust exemption will inevitably lead to far higher medical costs and insurance premiums. Karen Ignagni, president and chief executive officer of the Washington-based American Association of Health Plans, a vocal foe of antitrust exemptions, called the federal exemption the most anticonsumer piece of legislation in decades. New Jersey's association of health plans had a similar analysis.
"There is no doubt in my mind this will drive up the costs of health insurance," said Michele Guhl, president of the New Jersey Association of Health Plans. "Employers who already are suffering from the current economy will have no choice but to shift more and more of the cost to their employees."
During the past two years, legislatures in more than a dozen states have considered but failed to pass similar antitrust measures patterned after a federal law that stalled in Congress in 1998.