NCPA - National Center for Policy Analysis

Collective Bargaining For Physicians Bad For Health Costs

July 28, 2000

The House has passed H.R. 1304, the Quality Health-Care Coalition Act of 1999, by an overwhelming majority of 276 to 136 on June 29, 2000. This Act would allow health care professionals such as physicians, dentists and pharmacists to form unions or coalitions to negotiate better contracts with health plans. The Act would also exempt these new organizations from prosecution for any antitrust violations for three years.

Although allowing organized professionals to negotiate with this protection will lead to higher compensation for the health professionals and greater flexibility for them to provide care as they deem necessary, it will also have a significant impact on the cost of health care and therefore health insurance premiums.

The Congressional Budget Office estimates this bill cost will increase health insurance premiums at least 1.5 percent and decrease federal and state tax revenues. Health professionals are expected to utilize this new avenue in significant numbers, says the CBO:

  • Almost 40 percent of physicians would join a union or a coalition, especially if the temporary anti-trust exemption were made permanent.
  • About 33 percent of pharmacists would join one of these organizations.
  • Physicians, dentists, and pharmacists are expected to receive a 15 percent average pay increase from collective bargaining.

The House attempted to restrain the effects of the Act by limiting the antitrust exemption to three years; however the CBO believes that cost and premium increases will persist even after the expiration of the Act.

The House also inserted a provision into the Act to protect the coffers of the federal government. It allows collective bargaining for those providing services to federal beneficiaries, but does not give them the antitrust protection, insulating the federal government from the increased costs that all others will have to bear.

Source: "H.R. 1304: Quality Health-Care Coalition Act of 2000," Congressional Budget Office Cost Estimate, May 17, 2000.


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