There was a lot of attention given to the fact that doctors have the right to form labor unions, but little has been said about what effect this will have on businesses.
While many envision doctors walking picket lines demanding higher wages, and in turn, causing health insurance premiums to skyrocket, that probably won’t be the case for several reasons:
- Lack of solidarity. First, the unionization movement is a product of the American Medical Association, which claims less than half of all physicians as members. These new union members would be highly educated people making in the neighborhood of $200,000 per year, and would not be inclined to walk a picket line. The same principles that usually keep the pilot unions from striking would also apply to physicians.
Instead, issues of control will probably be at the forefront. Doctors want control of the way their patients are treated and what they are allowed to prescribe.
- Unions may actually stabilize prices. “A contract agreement for three to five years stabilizes wages,” says Thomas Kolenko, associate professor of management at Kennesaw State University near Atlanta. “If market wages went up, the health employer would be able to contain their labor costs with the agreement.”
- Lack of public support for wage issues. “If it’s viewed as the physicians organizing for more income, there would be a tremendous backlash, because there is already the perception they are making too much,” says Rodney Alsup, associate dean for graduate programs at the Cole College of Business at KSU. “What reason are they going to convey to the public? If it’s for better patient care, then the public will be more sympathetic. If it becomes an issue of income, they will have a long, drawn-out battle.”
There is also the question of the AMA’s motives. With membership shrinking, is this a ploy to gain new members, or is this truly to provide better service and look out for the patients’ best interests?
If doctors in this area do form unions, there isn’t much a smaller company can do about any cost increases. Without the leverage of large employee populations, smaller firms can expect the costs of negotiations to be passed on to them — though the beforementioned stabilization should limit their rate increases during the span of the contract.
Smaller firms that are unionized themselves may face the prospect of having their own unions pressuring them at contract talks to only receive health insurance from unionized health providers.
It’s not clear what form any potential physician union would take, but the AMA recently took steps toward forming a national negotiating organization by naming members of the governing body and recommending a constitution.
“Employer hospitals are the ones most likely to be organized,” says Kolenko. “The most poorly managed facilities — not just on the employee relations side, but also on quality of care, funding, stability and patient load, will be vulnerable. The doctors in those systems feel the most abused. The lack of responsiveness from management will make them a hot target, and the AMA will look at the hot targets first.
“They will concentrate there to get some quick, early victories, capitalize on those and build momentum.”
Todd Shryock ([email protected]) is SBN’s special reports editor.
