Health care reform is a kind of circus where the sideshows can be just as intriguing as the main attractions. Consider the case of the American Medical Association, which represents about 43 percent of the nation's roughly 612,000 physicians, and its attempt to rewrite antitrust law. If the AMA succeeds, critics say, groups of doctors could band together, fix their fees and boycott health insurers or reject patients who wanted to pay them less. That would give physicians all the power of a labor union, without the bother of having to form one. Who thinks that's a good idea? Quite possibly, former antitrust law Prof. Bill Clinton. "I think we have to change the antitrust laws to allow you to organize to provide your services," the president told California doctors in a satellite broadcast last month.
Antitrust is low on the list of health issues facing Congress -- but it is at the epicenter of the earthquake shaking the health care market. Dozens of hospitals are merging and "managed care" groups, such as Health Maintenance Organizations, are proliferating -- all products of a vigorous drive to contain health costs. Yet many doctors say they lack the economic clout to hold their own against huge insurers and other HMO sponsors, who typically demand that physicians discount fees or change the way they practice. That is why the AMA wants to enhance doctors' bargaining power without running afoul of the government for forming illegal cartels. Not surprisingly, the prospect alarms insurers, consumer groups, health care providers who compete with doctors and some in Congress. "If you provide these exemptions, you're going to drive up health care costs and jeopardize the public's ability to obtain doctors' services," warns Sen. Howard Metzenbaum, an Ohio Democrat, who heads a Senate judiciary subcommittee on antitrust matters.
Safe harbors. The changes that the AMA seeks sound like legal minutiae, but they would represent major departures from current law. Under today's federal antitrust guidelines, a group of doctors who constitute less than 20 percent of the local health- care market and who are "financially integrated" -- for example, they sign up with an HMO to treat patients for a preset annual fee -- enjoy a legal "safe harbor." That means that they can probably get together legally to negotiate fees. Moreover, if their actions come under scrutiny, they are judged according to a legal standard that weighs the pro-competitive benefits -- say, a bigger HMO that offered better deals to consumers -- against the possible anticompetitive effects from having the doctors negotiate together. Among other changes, the AMA wants this safe harbor expanded to include doctors who represent 35 percent of the local market, or up to 50 percent if the physicians are free to join other groups. The result would greatly increase physicians' bargaining power against insurers or other groups that sought a deal with doctors.
Some Republicans would even go the AMA one better. Sens. Strom Thurmond of South Carolina and Orrin Hatch of Utah have proposed legislation that would allow physicians who represented as much as 20 percent of a local market to join forces in any collaborative venture and to be exempt from antitrust restrictions altogether. Backers argue that such a small corps of doctors wouldn't be big enough to distort the market -- and that giving them an antitrust green light could cut excessive legal costs and litigation. Yet that raises the specter of a cartelized market, where five doctors' groups, each with a 20 percent share, fixed their fees and hiked prices, contends Washington attorney Robert Bloch, among whose clients is the Group Health Association of America, a trade group of HMOs. Nonsense, retorts Kirk Johnson, the AMA's general counsel. In today's hotly competitive health care market, he says, a situation like that would "last for about one month" before some doctors broke ranks and undercut others' prices.
With the outcome of health reform uncertain, it's anyone's guess whether Congress and Clinton will agree to antitrust changes. Meanwhile, opposition is developing among rival health care providers who have used the antitrust laws to fight doctors' efforts to drive them out of business. "If we don't have these protections, doctors will do whatever they can to restrict us or keep us out of hospitals," argues Mary Jeanette Mannino, government relations specialist for the American Association of Nurse Anesthetists. Yet the Clinton administration seems torn, as well it might be, since the complex arguments deal with what the health care market might look like in the future. Some officials vigorously dispute doctors' claims that gray areas in current law cast doubt on physicians' ability to launch new ventures. Still others sympathize with doctors' contentions that, without changes, the health system will be run mainly by profit-hungry insurers, rather than quality-minded doctors who will advocate in patients' behalf.
Make no bones about it: This fight underscores the fact that the health reform battle is largely about divvying up a burgeoning one seventh of the U.S. economy. And the AMA's political prowess will ultimately determine whether the final prescription is in its favor.
