By Jeffrey Barg

A brief history in two parts

The Pa. delegation at the June, 1999 meeting of the AMA House of Delegates

Published August 1999

OTHER COVERAGE OF PHYSICIAN UNIONS

• Physicians seek antitrust waiver

• Surgeons fight Blue Cross rate cuts

• Medical society explores regionalization and MD unions

• Legal issues of physician unionization

• Physician unions gain steam

• AMA collective bargaining program

• A Pennsylvania physician guild

• Building a physician union in the Delaware Valley

• The legalities of physician unions

• Prospect of physician unions in Pa.

• React to this article in the Discussion Forum.

Podiatrist union president John Mattiacci

Former PCMS President Raymond J. Lodise, M.D.

Former PSIM President Robert B. Sklaroff, M.D.

Former AMA President Nancy W. Dickey, M.D.

Former ACMS President David S. Zorub, M.D.

Reflecting a direct conflict between the American Medical Association Board of Trustees and the AMA’s broader membership, the beleaguered organization took a decisive step in redefining the besieged medical profession.

The AMA will be forming a national labor organization to organize and represent employed physicians, including residents and fellows, for the purposes of collective bargaining; also, the AMA will be preparing to represent self-employed physicians in collective bargaining following passage of legislation that would afford federal antitrust relief.

The vote punctuated a three-year identity crisis experienced by the profession that is not likely to end anytime soon, but a decisive turning point has been crossed. The AMA, with everybody watching, has put its stamp of approval on physician unions. A warning shot has been sent across the bow of purchasers of health care. The conservative AMA has become radicalized.

While physician unions have existed in this country for over 40 years, they have always consisted of a small percentage of physicians confined largely to those who were publicly-employed. Until recently, the medical profession was primarily populated by independent solo practitioners and small group practices operating with tremendous autonomy. Doctors have, however, been increasingly squeezed by state and federal governments, huge hospital systems and consolidated health insurers, all demanding that they do more with less. Yet, because they retain legal and ethical responsibility for the care provided to their patients, physicians have been seeking ways to collectively protect their profession and their patients. The traditional tools of medical societies have proven to be insufficient for many members and over the past three years a number of traditional labor unions have attempted to fill the gap.

The machinations of physicians and their professional organizations as they have come to grips with these developments have been dramatic and frequently poignant. Pennsylvania has been an important scene for this human drama.

First Pa. Physician Union

Pennsylvania’s oldest physician union still in existence today was formed in the early 1970s.

In 1970, Pennsylvania adopted legislation establishing the right of public employees to organize and collectively bargain with their employers. Thus, in the early 1970s, many different unions for state employees sprang up, including the Pennsylvania Association of State Mental Hospital Physicians.

Rather than affiliate with an existing union, the mental hospital physicians, mostly psychiatrists, formed an independent union with the assistance of Philadelphia labor attorney Leonard Spear, who became the union’s executive director.

The state challenged the formation of a collective bargaining unit on the grounds that physicians, by definition, are supervisory and managerial in regard to the care provided to their patients, and therefore are prohibited from collective bargaining. The Pennsylvania Labor Relations Board ultimately certified the collective bargaining unit, however, ruling that apart from their patient care responsibilities, the terms and conditions of their employment were set by the state.

Over 80 percent of the physicians working at the state mental hospitals joined the union, composed of approximately 600 members in the early days. The physicians wanted a stronger voice to engage the legislature and administration on behalf of themselves and their patients within the chronically under-funded state mental health system.

The union has successfully bargained contracts and pursued physician grievances since the early 1970s outside of the view of the bulk of Pa. physicians and their professional organizations. Even if other physicians were aware of the union’s activities, it would have been considered as something foreign with little, if any, relation to their situation. All this was to change quite drastically in the latter half of the 1990s.

PCMS Meets OPEIU

In August of 1996, the Office Professional Employees International Union (OPEIU), an affiliate of the AFL-CIO, formed a national podiatric union in association with the American Podiatric Medical Association. The headquarters for the First National Guild for Health Care Providers of the Lower Extremities is in Harrisburg and its president is Philadelphia podiatrist John Mattiacci.

On February 6, 1997, the Philadelphia County Medical Society (PCMS) held a mass meeting to explore forming a physician union together with seven neighboring medical societies in Southeastern Pa. and Southern New Jersey. Officials of the OPEIU and the podiatric union made presentations and answered questions to an unusually large, youthful and quiet medical society audience of 250 physicians.

When asked why medical societies needed the assistance of labor unions to regain control of medical practice, podiatrist Mattiacci answered rhetorically: "When you need protection which would you rather have: a pit bull or a toothless dog?" Mattiacci’s massive frame and gruff South Philadelphia accent reinforced the blunt reply, which resonated in future medical society discussions of the issue.

Mattiacci personifies power at a time that physicians feel powerless against the dictates of government, managed care organizations and consolidated hospital systems. But power at what cost? Mattiacci in particular, and traditional labor unions in general, evoke attraction or repulsion among physicians, and frequently both. Ironically, the OPEIU attempts to distinguish itself as a "white collar" union, but Mattiacci’s appearance, manner and podiatric pedigree strike most physicians as decidedly "blue collar."

The meeting generated enough interest to impel the PCMS Board to authorize PCMS President Raymond J. Lodise, M.D., to further explore interest in and the feasibility of a physician union. Lodise, a medical society veteran who had worked his way up to the presidency, seized the opportunity to push for wholesale change within the conservative organization.

Lodise had attempted to organize a physician union back in 1973 and was a longtime family friend of Mattiacci. Now that he had achieved control of the eighth largest county medical society in the country, he intended to shake things up during his year-long term. His agenda was broad and ambitious: form an IPA affiliated with medical societies encompassing all of Southeastern Pennsylvania and form a regional medical society with an affiliated physician union, the ultimate goal being to gain the size and power to allow physicians to regain control of medical practice.

The physician union tied all of the pieces together and provided its animating power. Each area medical society would vote to affiliate with the union, then its members would be eligible to join. Area physicians who wished to join the union but not to join a county medical society would be required to a join a new regional medical society in order to be eligible. This design would avoid competition between medical societies and the union for members, with each helping the other to gain members and the medical societies setting the policy agenda for the union. By affiliating with a large, traditional labor union, physicians would gain the strength of the union in pushing their legislative agenda. Moreover, the union, with its influence over health insurance purchasing decisions, would hem in the abuses of managed care and direct business to the medical societies’ IPA. Deferral of any program of collective bargaining on behalf of physicians would obviate problems of self-employed physician eligibility or the lighting rod issue of strikes. The union would serve the interests of both physicians and patients in upholding patients’ rights in negotiations on behalf of its rank and file rather than in negotiations over physician fees and working conditions, which could erode the image and ethics of the profession.

To this enterprise, Lodise added another: a legal challenge to the consolidation of Pennsylvania Blue Shield and Blue Cross of Western Pennsylvania, forming the nation’s 8th largest health insurance company. Lodise pushed his agenda forward aggressively in the lay and medical press and at various medical meetings, including his welcoming remarks at the AMA National Leadership Conference held in Philadelphia on March 16, 1997. In an interview with Physician’s News Digest conducted in early March, Lodise said he was just about certain that a regional physician union would be formed by three county medical societies from Southeastern Pennsylvania and three from Southern New Jersey at a meeting scheduled for April 17.

Lodise’s political fortunes took an abrupt turn when, at an April 9th PCMS Board of Directors meeting, a majority gave him a no confidence vote and referred him for possible disciplinary measures to the PCMS Board of Censors. Lodise had gotten too far out ahead of a majority of the board. His brash public statements, his lack of candor with the board and his budget overrun in the Blues litigation caused a vicious backlash from his opponents for which he was ill-prepared. The success of his media advocacy and the Blues litigation (PCMS and the Pennsylvania Society of Internal Medicine had gained standing in their legal challenge to the Blues consolidation on March 27th) had targeted him as a man who had to be stopped.

The April 17th meeting on physician unions came and went without any decision to move forward with the plan. Subsequent board meetings were mired in escalating conflict with the threat of removal from office hanging over Lodise’s head and his counter-threat to file a lawsuit against PCMS for defamation. With his presidential term ending in June and his agenda stalled, Lodise took the unprecedented step of running for president a second time. If elected, it would give his agenda a mandate for the next two years: the first of which he would serve as president-elect and the second as president.

While Lodise received the most votes in an initial three-person race, he lost in a runoff election. Lodise subsequently dropped his participation in the medical society even though he held the position of immediate past president on the board’s executive committee for a year after his presidency ended. The disposition of his case before the PCMS Board of Censors was never resolved and it remains there to this day.

Pennsylvania Physicians Guild

Lodise departed the scene convinced that if physician unionization were ever get off the ground, it would have to happen outside of the confines of organized medicine. But the OPEIU was still committed to forming physician unions in association with medical societies because of the difficulties of building an organization from scratch over the opposition of organized medicine. Robert B. Sklaroff, M.D., a Lodise protegee on the PCMS Board and president of the Pennsylvania Society of Internal Medicine, hoped to forge a physician union within organized medicine as well.

Sklaroff drew up plans for a Pennsylvania Physicians Guild (PPG) in the Fall of 1997. Unlike Lodise, Sklaroff believed the union should be involved in organizing National Labor Relations Board-certified collective bargaining units right from the start. By effectively representing employed physicians in collective bargaining and resolving grievances, Sklaroff reasoned, a physician union could best establish itself as a force that enabled physicians to advocate for their patients. Sklaroff deferred final resolution of the contentious strike issue, but had offered the possibility that any withholding of non-emergency care could be made to require a super-majority vote. The OPEIU, in contrast, adopted a no-strike policy.

While Sklaroff had met with the OPEIU about a possible role in the plan, he was beginning to feel that such traditional labor unions made insurmountable the already difficult psychological leap required of physicians to conceive of themselves as union members. He approached two Pennsylvania unions that represent other health professionals, the Pennsylvania Nurses Association and the Pennsylvania State Education Association, as potentially more palatable alternatives.

On November 6th, Sklaroff sent a memo soliciting interest in his PPG concept to the presidents of every statewide medical society and every county medical society in Pennsylvania. In the memo, he proposed that each statewide medical society provide a representative to a newly-constituted governing council for the PPG. While Sklaroff invited the participation of the Pennsylvania Medical Society (PMS), the structure was designed not to give PMS undue influence and to enable statewide organized medicine participation even if PMS opted out.

Sklaroff received no response to his memo.

AMA Division of Representation

Meanwhile, the opponents of physician unions at the PCMS sought the help of the AMA to squelch residual interest in the concept within their ranks. On September 29th, then-AMA President-Elect Nancy W. Dickey, M.D., came to the PCMS to talk about the AMA’s alternative to unionization: the AMA Division of Representation.

Dickey related how her father was a member of a labor union. She recalled sitting around the family dinner table as her father would complain about how the union leadership repeatedly failed to reflect the views of the membership, but that they could not throw out the rascals. She then voiced her reservations about how a traditional labor union could possibly reflect the values of the medical profession. Unions are concerned about their members’ wages and benefits and their most important weapon is the strike. That is inconsistent with the ethics of the medical profession in which physicians are bound to put their patients’ interests above all else, she said.

In contrast, the Division of Representation would—in collaboration with state, county and specialty societies—provide assistance or representation for physicians in contract negotiations. As then-PCMS President Julian Katz, M.D., put it in his column in Philadelphia Medicine: "Dr. Dickey pointed out that collective bargaining can be achieved without unionization." This could be achieved by local medical societies discussing patient care issues with health plans as outlined in the Department of Justice/Federal Trade Commission antitrust guidelines; by providing action plans for negotiations and grievance proceedings including sample letters and contract provisions, legal and media strategies; and by assisting employed physicians seeking to collectively bargain with their employers, including, if requested, assisting in forming a recognized collective bargaining unit.

Although the Division of Representation included assistance in forming a certified collective bargaining unit, one of the core functions of a labor union, Dickey was intent on distinguishing the AMA program from a traditional labor union. In an interview with Physician’s News Digest conducted two weeks after her PCMS talk, Dickey described what she characterized as the "blurry boundary" between the Division of Representation program and unionization: "In Connecticut, they have a PSO that has recently formed that represents the physicians with insurance companies regarding rates and contract issues but is also able to address issues that are much more patient-oriented than physician-oriented: issues of utilization, review process and quality insurance mechanisms, appeals process for patients whose request for treatment is denied. Many of those are issues that are much more compatible with the visions and history of the medical association than they are with the union, who traditionally is looking out almost entirely for the economic well being of the employee. There are some concerns with the traditional union organization and the fact that they have a different perspective and vision than physicians and the profession of medicine have had, and whether those two can live compatibly together or if they are not compatible, which one can take precedence."

Dickey’s PCMS presentation was more sparsely attended than the first two union meetings and was largely confined to an older group of society regulars. Nonetheless, a series of tough questions from the audience seemed to register a degree of skepticism about the ability of the AMA program to level the playing field.

In December of 1997, the OPEIU advanced its agenda further by forming a Pennsylvania Optometric Guild under the presidency of out-going Philadelphia County Optometric Society President Aaron Chasan. Membership in the guild required membership in the Pennsylvania Optometric Society even though the society generally opposed the formation of the guild. The primary animating issue for the union was a new Independence Blue Cross (IBC) program using Davis Vision, which the guild claimed would severely cut optometrists’ reimbursement and diminish patient care. The guild staged a demonstration outside of IBC headquarters in center city Philadelphia on December 23rd. The demonstration featured around 50 optometrists and their supporters, most of the optometrists being independent business-people, singing "solidarity forever, for the union makes us strong" and other traditional labor anthems.

Allegheny County Medical Society

In 1998, Allegheny County Medical Society’s (ACMS) new president, David S. Zorub, M.D., made exploration of physician unions one of the three top priorities of his presidency. The April 21 Spring Business Meeting of ACMS was devoted to unionization, with presentations given by ACMS Counsel Edward J. Kabala, Esq., Pittsburgh’s regional director of the National Labor Relations Board Gerald Kobell, Esq., Pittsburgh labor attorney Stephen H. Jordan, Esq., and PMS Executive Vice President Roger Mecum. The entire May 23rd issue of ACMS’s Bulletin, was devoted to essays from Zorub and the presenters on physician unions.

Zorub’s essay summed up physician sentiment: "Most physicians cannot fathom forming a union to represent their interests, and consider it a complete compromise of their professionalism. Many other physicians at least want to know the options. Still other physicians are so frustrated with the current changes in health care [that] they believe unionizing is the only way to restore to physicians and protect patients."

Zorub and ACMS Counsel Kabala ended their essays in a similar fashion. Zorub: "The need is great. The urgency is clear—lengthy committee work will not make sufficient progress. As we go forward we must not make the mistake of focusing primarily on economic issues. Our autonomy is more precious than income, and will benefit patients most. Physicians must also be able to act and vote as a group in order to give strength to any representative structure. . . . [T]his means subjugating our own individual interests to those of the greater good of physicians." Kabala: "The label is unimportant. Call it a society, a union, a guild, or a division of representation, the truth is that unless the members have clear goals and a willingness to spend significant funds to organize and then be bound by the majority decision, we will see a continuation of disorganized medicine trying to compete with organized foes."

Despite Zorub’s sense of urgency, his term ended in December without much progress in developing a union or guild option for ACMS members. In his final presidential column published in the ACMS Bulletin, Zorub noted that the society had begun investigating options for collective bargaining and that this course must be pursued in response to member requests.

While efforts to provide physicians with collective bargaining options were stymied by a lack of consensus within county medical societies and statewide specialty societies, the PMS cautiously moved forward with its Division of Representation. The PMS’s program took on some real momentum when Geisinger Medical Center physicians sought assistance in forming a collective bargaining unit in the fall of 1998. The summer of 1998 brought the AFL-CIO-affiliated Federation of Physicians and Dentists into the Philadelphia area to assist surgeons in resisting a 16 percent across-the-board reduction in surgical reimbursement rates from Independence Blue Cross. In July of 1999 the Pennsylvania Association of State Mental Hospital Physicians affiliated with another large AFL-CIO international union, the Service Employees International Union, in part to expand the union by organizing other Pa. physicians employed at private sector hospitals. At the same time, the AMA released its plans to form a national labor organization. Next month’s issue will spell out these recent developments in part two of this series.