Antitrust reform: Physicians need the right to negotiate

With the FTC and the Justice Dept. reiterating their stance against joint negotiation with health plans, it's more important than ever for Congress to pass antitrust relief for physicians.

Posted Sept. 6, 2004.

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Two key federal agencies cite the need for more competition in the health care market as a reason why they, again, are refusing to allow physicians to negotiate collectively with health plans. And yet these agencies, again, are failing to recognize the long-term impact health insurance company mergers would have on patients and physicians.

The Federal Trade Commission and the Dept. of Justice on July 23 released a 300-page report saying, again, that collective bargaining by independent physicians would have a negative impact on health care competition. This comes after 27 days of testimony in 2002 and 2003.

The AMA was among those testifying about why antitrust relief is necessary. A big reason why: health plans continue to get larger and larger, giving physicians less and less leverage to negotiate contracts. The plans not only dictate reimbursement, but also unilaterally define medical necessity and other coverage issues that would affect patients. So despite the FTC and Dept. of Justice report, the AMA remains committed to bringing antitrust relief to all physicians.

The FTC and Justice Dept. report restates their past position that physicians may not negotiate collectively with plans unless they are employed, or they work in a handful of states that have passed physician collective bargaining laws. Instead, the report recommends that insurers and the government find payment methods that encourage physicians to lower costs, improve quality and innovate. Perhaps if groups that integrated clinically found ways to meet those goals, rather than focus on prices, the FTC and Justice Dept. say they may look kindly on collective negotiation.

Certainly, lowering costs while improving quality is a laudable goal. However, even the agencies acknowledge in the report that, for the most part, the plans' payments to physicians generally are based on a simple accounting of services rendered, with no connection to quality.

What's a more likely result of health plans' virtually unchecked power is a profit-driven squeeze on physician pay and patient benefits -- hardly an encouraging picture for patient access or choice.

Meanwhile, the consolidation goes on. AMA and other physician advocates have told the government that health plans continue to grow larger and hold more power over the health care marketplace.

The FTC and Justice Dept. found no trouble at all to health care competition when, this year, they approved the $16.4 billion merger of Anthem Inc. and WellPoint Health Networks to create the nation's largest health plan, and the $3.7 billion merger of Oxford Health Plans by the nation's No. 2 health plan, United HealthGroup. (As of this writing, Anthem is suing a California regulator who refused to approve the merger, and United is fighting the Medical Society of New Jersey's effort to overturn state regulators' approval of that deal.)

In fact, in its report, neither agency made a peep about the impact health care plan consolidation -- with the top two plans in any given metropolitan area generally having greater than a 50% market share -- is having on health care.

What physicians are looking for is a fair fight.

That's why the AMA is continuing to look for support for the Health Care Antitrust Improvements Act of 2003. It's a House bill that would allow physicians to receive permission to negotiate collectively with insurers. It also would limit sanctions against physicians who were found not to be in accordance with antitrust statutes, but whose conduct was deemed to be in "good faith." Finally, it also would establish demonstration projects allowing doctors jointly to negotiate contracts with health plans.

This is what is needed to ensure that managed care doesn't get a greater and greater carte blanche to impose its will on physicians and patients. Again.

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