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The issue erupted at the American Medical Assn.'s annual meeting, set to end on June 20 in Chicago. Three years ago, fired-up members forced their tradition-bound leadership to set up a group to help doctors form an AMA-sanctioned union. But resistance from AMA leaders, who fear that union-management tensions would compromise patient care, has stymied the group. Called Physicians for Responsible Negotiation (PRN), it has signed up only a few hundred docs since 1999.

The AMA's sharply divided board of trustees voted narrowly in April to deny the PRN an $800,000 loan, on top of some $2.5 million in seed capital the group initially received. Given the PRN's difficulty in signing up members, lending more would not be "good business judgment," says Dr. Timothy Flaherty, the AMA board chairman. Yet, on June 19, members again overruled their leaders to give the PRN more money. Charges PRN President Dr. Mark L. Fox: "We are dealing with a mindset [among AMA leaders] that is antilabor."

Regardless of whether the AMA ever sanctions unionization, the effort is likely to have a big impact on American medicine. There are already four other major physicians' unions, which have been growing by up to 30% a year (see table below).

"RIPE FOR ORGANIZING." For patients, this cuts two ways. Unions are helping doctors stand up to managed-care restrictions, giving them more freedom to prescribe treatments they see as medically necessary. At the same time, though, medical costs are likely to rise. Already-strapped hospitals dread the prospect of bargaining with doctors, says Richard Wade, senior vice-president of the American Hospital Assn. "And think of the implications of physician strikes," he warns.

Doctor unions received a big boost in the 1990s, when physicians rebelled against cost-cutting rules that often overrode medical decisions. The public backlash against managed care has also fueled many doctors' desire to find ways to cope with continued cost-cutting pressures. The 3,500-member Doctors Council, an affiliate of the Service Employees International Union (SEIU), has grown by nearly a third since 1999.

Another SEIU affiliate, the Committee of Interns & Residents, has capitalized on legal rulings that allow docs in training to bargain collectively. Its membership, too, has jumped by a third since 1999, to 12,000. "Residents are overworked and feel undervalued," says Dr. Ruth Potee, the committee's president and a third-year resident physician at Boston Medical Center. "It is a group ripe for organizing."

GOING FOR BROKERS. Other unions are using innovative tactics to sign up independent medical practitioners, despite the fact that antitrust law prevents them from bargaining jointly with insurers. For example, the 6,000-member Union of American Physicians & Dentists (UAPD), a unit of the American Federation of State, County & Municipal Employees, has formed a group of some 1,500 independent doctors in California that supplies employers with docs who treat employees on a fee-for-service basis.

One union is even trying to play a broker role with insurers on behalf of independent practitioners. An offshoot of the UAPD called the Federation of Physicians & Dentists (FPD) has signed up 7,000 independents around the country who use the FPD as an intermediary in negotiations with various insurers. The FPD hopes to skirt antitrust law by acting as the go-between for each individual doctor, rather than for all of them as a group. Last fall, it reached a consent decree with the Justice Dept. that would permit this practice. The decree is still pending before a federal judge in Delaware.

So far, the AMA's organizing group, the PRN, hasn't come close to matching any of these moves. It has won a contract for 38 HMO doctors in the Detroit area and is struggling to secure another one for about 20 doctors in Austin, Tex., says Fox. The PRN also is fighting legal battles to represent 15 doctors in New Jersey and 170 others in Chicago.

OUT OF TOUCH? Fox's problem is that the AMA isn't willing to let him use the tactics other unions have adopted. The PRN was set up largely to do battle with insurers for independent practitioners, who make up the bulk of the AMA's 278,000 members. The AMA pinned its hopes on federal legislation that would remove antitrust barriers. Meanwhile, the PRN has spent most of its resources fighting legal battles -- and the legislation remains stalled on Capitol Hill. Absent a clear legal terrain, the AMA hasn't wanted Fox to bargain for independents anyway. "Collective bargaining should be a last resort, not the first resort," says AMA head Flaherty.

Trouble is, his members appear to disagree. Many see the group as out of touch on a range of issues and are voting with their feet: The AMA now represents just 30% of the nation's doctors, down from 34% in 1999 and 45% a decade earlier. AMA leaders may not like the idea of doctors joining unions, but until they come up with some other strategy, the storied association may continue to shrink.

WHERE DOCTORS CAN GET ORGANIZED

Physicians are joining unions in droves across the U.S. Here's a look at the major groups:

Committee of Interns & Residents: 12,000 members, most at public hospitals. Affiliated with the Service Employees International Union (SEIU)

Doctors Council: 3,500 docs, half in private hospitals, the others in public ones, mainly in New York City. Also part of SEIU

Union of American Physicians & Dentists: 6,000 members, about two-thirds working for state and local hospitals or clinics. An additional 1,500 independent practitioners in California work for companies on a fee-for-service basis. Affiliated with American Federation of State, County, & Municipal Employees (AFSCME)

Federation of Physicians & Dentists: 8,500-member group of mostly independent practitioners that split from UAPD in 1989. Negotiates with insurers on behalf of members but doesn't represent them formally as a union. Still part of AFSCME

Physicians for Responsible Negotiation: Started in 1999 by the American Medical Assn. to pursue unionization, mostly for independent practitioners. Short-staffed and underfunded, it currently represents just 38 Detroit-area doctors

Data: BusinessWeek By Joseph Weber in Chicago


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