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Physician Unions Prescribed as Response to Healthcare Consolidation

Analysis  |  By Christopher Cheney  
   August 02, 2022

Experts from Duke University School of Law and Stanford University say physician unions can empower clinicians employed at health systems, hospitals, and other corporate entities.

Given consolidation in healthcare such as health systems acquiring independent physician practices, physicians are missing an opportunity to form unions to improve their status, a new opinion article in the Journal of the American Medical Association says.

Over the past decade, the percentage of independent practicing physicians has declined sharply. In 2012, physicians owned 60% of practices and 5.6% of physicians were employed directly by hospitals, the American Medical Association reported. In 2022, 52.1% of physicians were employed by health systems or hospitals, with another 21.8% employed by other corporate entities, for a total estimate of 74% of practicing physicians working as employees.

The healthcare consolidation trend can have a negative impact on physicians, the co-authors of the new opinion article wrote. "This rapid transformation has largely followed an aggressive strategy, put forward by hospital and corporate leadership, that seeks scale and exploits market power. However, it is also a strategy that is increasingly at odds with the interests of the physicians working in these organizations. The strategic differences are revealed in a variety of important policy differences, spanning from payer contracting strategies, compensation incentive structures, and service line prioritization."

While physician unions have been formed for decades, there are relatively few unionized physicians compared to employees in other industries. As of 2021, 7.9% of surgeons and 5.8% of other physicians had joined unions, according to Unionstats.com.

Physicians considering the formation of unions should have three primary considerations, the co-authors wrote.

1. Value of collective bargaining versus contracting individually for services: "If collective bargaining is seen as advantageous, physicians need to determine who the union represents: all physicians within a system or only those at a specific hospital? All physicians across specialties or only specific departments? This latter concern reflects the potential challenge when different clinicians have different compensation and governance interests within a single organization," the co-authors wrote.

2. Value of collective bargaining for salary: "For example, primary care physicians and specialist physicians may decide to join the same union and participate in joint negotiation with the hospital in a fee-for-service payment model, but they might prefer different unions when the financial interests of primary care physicians and specialist physicians diverge under a capitated payment model (this diversity of interest is reflected when nurses and other clinical staff join different unions or different bargaining units under the same union)," the co-authors wrote.

3. Value of unionization to shape hospital policies: "Collective bargaining can help address strategic issues that are of great interest to employees, such as in 2022 when nurses at Sutter Health went on strike over staffing shortages and access to adequate personal protective equipment. Policies related to the practice of medicine may benefit from explicit consideration through collective bargaining. Physicians and hospital managers might disagree over patient discharge policies, documentation standards, quality improvement programs, and requirements for after-visit services," the co-authors wrote.

Physician unions have limitations, the co-authors wrote. "They may not provide as much leverage for input into strategy as physician-led organizational structures such as physician-owned practices or other professional corporation models. For example, Kaiser Permanente Medical Groups are independent regional entities that negotiate with Kaiser health plans and hospitals. Further, unions are likely to expose differences in perspectives and incentives between rank and file physicians and their leaders (such as department chairs). This divergence of interests might further complicate the advocacy of physician interests into governance."

In addition, physician unions are unlikely to undo negative consequences of healthcare consolidation, the co-authors wrote. "Physician unions will be unable to convert the capital-intensive nature of health care systems into a meaningfully different economic enterprise. Those who question the sustainability and wisdom of these US healthcare giants are unlikely to find that unions can be used to curtail the deleterious effects of healthcare consolidation."

Related: Oregon Physicians File to Join Union

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


KEY TAKEAWAYS

A decade ago, most doctors worked at physician-owned practices. In 2022, about three-quarters of physicians work for health systems, hospitals, or other corporate entities.

There are relatively few unionized physicians compared to unionized professionals and employees in other industries.

The trend toward consolidation in healthcare has spawned divergent interests between employed physicians and their corporate employers such as compensation incentive structures.

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