NBCH Policy Papers
Spring, 2000
Position on H.R. 1304, "The Quality Healthcare Coalition Act of 1999"
(A bill to permit physicians to form cartels and engage in price-fixing)
The National Business Coalition on Health (NBCH) opposes legislation that would reform antitrust laws to permit physicians to collectively bargain with employer sponsored health plans under the National Labor Relations Act. H.R. 1304 seeks to treat independent competitors as a joint bargaining unit, or a cartel. Such cartels are illegal under current antitrust laws. H.R. 1304 would entitle physicians to an unprecedented exemption not currently enjoyed by any other profession or trade. Consequently, H.R. 1304 would drive up physician incomes by 15% on average, as estimated by the Congressional Budget Office (CBO).
If physicians want to increase their negotiating clout with employer sponsored health plans, there are options available to them under current law. Such options include joining an Independent Practice Association (IPA) or a Physician Hospital Organization (PHO).
Based on a recent survey of employers by William M. Mercer, Incorporated, employers' health care costs are already expected to rise 7.3 percent this year. And the passage of H.R. 1304 would cause an incremental increase in health insurance premiums of 5.8 to 11 percent according to a Charles River Associates study. Much of this increase would likely be borne by consumers.
Proponents of H.R. 1304 argue that its passage will increase quality. NBCH fails to see any correlation between raising physician fees by 15% and improving quality. A more pressing quality of care issue is a recent report, from the National Academy of Sciences, Institute of Medicine, which indicates that medical errors in U.S. hospitals kill between 44,000 and 98,000 people each year. Using the lower estimate, more people die each year from medical errors than from highway accidents, breast cancer or AIDS.
If improving health care quality is the true desire behind H.R.1304, then we invite proponents of H.R. 1304 to join NBCH and many employers around the country who are actively collaborating to improve health care quality. However, creating physician cartels is not the solution.
The National Business Coalition on Health (NBCH) "the coalition of coalitions" has a membership of nearly ninety employer-led coalitions across the United States, representing over 8,000 employers, predominately medium and large-sized private sector employers, and approximately 28 million employees and their dependents.
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