The American Medical Association has quietly abandoned the in-house labor union it created in 1999 after spending at least $3.6 million on an ill-fated venture that organized just 38 physicians in four years-a cost of about $95,000 per doctor.
With little public comment, the Chicago-based AMA has severed ties with Physicians for Responsible Negotiation and forgiven the union's accumulated debt.
The PRN, with the 38 doctors it organized in Detroit, is expected to forge an affiliation with the Service Employees International Union, which serves as an umbrella group for two other physician-related union organizations: the Committee of Interns and Residents, which has about 12,000 members, and the 5,000-member Doctors Council.
The announcement of the PRN's affiliation with the SEIU could come as early as next week, said Mark Levy, executive director of the CIR. He said negotiations to absorb the PRN-along with its existing board of directors-are awaiting only a few minor technical details.
AMA officials have said little about the failure of its ambitious and costly plan to tap into what they once felt would be a lucrative market of young doctors seeking the bargaining clout that often comes with unionization.
On March 10, the AMA issued a cursory statement from Michael Maves, M.D., the organization's executive vice president and chief executive officer, who was quoted as saying: "Recently, the AMA and PRN mutually agreed that PRN should operate as an entirely independent organization with no connection to the AMA."
But the news of the PRN's situation was never publicly announced or acknowledged by the AMA. The AMA did not comment, aside from the March 10 statement.
"It was the AMA's intention to very quietly put that up there without any announcement," Levy said.
The significant loss on loans to the union stands in sharp contrast to the rosy financial picture portrayed in the AMA's annual financial report, which was released last week with no mention at all of the PRN or its accumulated debt.
That financial report, which pegged operating profits at $20.1 million, did note another significant recent business setback by the AMA-an approximately $6.7 million loss since August 2000 on Preference Solutions, a database licensing business that was dissolved in June 2003.
After spending $5 million on a 50% ownership stake in the business, the AMA's share of operating losses amounted to $800,000 in 2003 and $1.6 million in 2002, the report said, adding that the AMA received about $700,000 when the company was disbanded.
The PRN has stoked controversy from its beginning, when it faced considerable difficulty competing directly with better-established groups such as the New York-based CIR and the Oakland, Calif.-based Union of American Physicians and Dentists.
The AMA's own board of directors opposed the creation of the PRN, predicting in a report that the group faced serious challenges because of its lack of experience in collective bargaining.
Levy said the PRN has far more to offer than just the 38 doctors in Michigan. He notes that the group has attracted attention from doctors despite its struggles and is awaiting appeals on two cases, including one involving about 170 residents and fellows at Advocate Lutheran General Hospital in Park Ridge, Ill.
The National Labor Relations Board ruled last year in favor the residents, but Lutheran General has challenged the decision.