The U.S. health care delivery system is undergoing a massive restructuring. Two developments have characterized this transformation. First, since the 1990s, hospitals have been consolidating to form health systems that now exert monopolistic leverage in many health care markets in the United States. Second, after the passage of the Affordable Care Act in 2010, these systems — along with large insurers and other corporate entities — began aggressively acquiring physician practices.
The result has been a sea change in physician-practice structures. In 2012, only 5.6% of U.S. physicians were directly employed by a hospital,1 and another 23% were in a practice that was at least partially owned by a hospital, according to a survey from the American Medical Association. By January 2022, the proportion of hospital-employed physicians had risen to 52%, with another 22% of physicians being employed by other corporate entities.2 Most physicians now face the possibly new experience of being employees of increasingly large organizations — a challenging scenario for a profession that has jealously guarded its independence and autonomy.
Not coincidentally, another workforce-related change has been slowly occurring in the United States: the formation of physician unions. Between 2014 and 2019, the proportion of physicians who were unionized grew by 26% (albeit from a low level), and this trend has accelerated over the past few years.3 In 2023, newspapers throughout the country reported on a successful union drive by 400 primary care physicians at Allina Health, based in Minneapolis. In the northwestern United States, about 200 hospitalists at six Legacy Health hospitals formed a union. In early 2024, physicians at Salem Hospital in Massachusetts, affiliated with Mass General Brigham, and anesthesiologists at Cedars–Sinai Medical Center in Los Angeles formed unions. This activity was in addition to a parallel wave of labor organizing among house staff in major health systems, including at Stanford Health Care (where we have appointments) and Penn Medicine; the Committee of Interns and Residents, a union under the Service Employees International Union, reports representing more than 30,000 U.S. members, which is nearly the total number of people who matched into residency programs in 2023.
Unionization is neither a rash reaction to professional frustrations nor an upstart, leftist political movement; it is a natural consequence of hospital consolidation and the corporatization of health care delivery. Depending on the way in which a health system chooses to allocate overhead costs among various clinical services, physicians can find that management seems to view their service as a financial drain on the organization. Executives may also consider physicians to be largely interchangeable, despite such matters as clinical focus or tenure in a community or at a facility. Amid shifts in practice structures, physicians may experience a deterioration in their working conditions, job satisfaction, and — most important — involvement in the governance of health care delivery, which has prompted some critics to warn that physicians are becoming “cogs of capitalism.”4
Unions are structures that permit collective bargaining between labor and management. Under the National Labor Relations Act, passed in 1935, employers are obligated to negotiate with unions on matters concerning “wages, hours, and other terms and conditions of employment.”1
With U.S. physicians increasingly becoming employees, they have also become exposed to a world in which the terms and conditions of their employment, compensation, and clinical practice are enshrined in legal contracts. Although these agreements are often described by health systems as “standard,” they are subject to negotiation. Individual physicians typically have little expertise in conducting negotiations, however, and little bargaining leverage.
Collective bargaining by means of unions offers a potential remedy to this power imbalance. As physicians explore whether collective bargaining can address their new concerns about the health care system and the future of medicine, they are likely to find that unions offer two opportunities that otherwise wouldn’t be available in today’s health sector.
The first is the opportunity to negotiate over wages with monopolists. By definition, a monopolist employer (or, more precisely, a single purchaser, or monopsonist, of labor) will set wages at subcompetitive levels. Employers with a unionized workforce, however, are under a legal obligation to negotiate in good faith with union representatives. This obligation explains why workers in industries dominated by a single employer, such as sports leagues, often choose to form unions. Without the National Football League (NFL) Players Association, for example, the NFL could set below-market wages, and the world’s best football players would have little bargaining recourse. The National Basketball Players Association has negotiated over “collective revenue,” and the new National Basketball Association (NBA) collective bargaining agreement ensures that the players collectively will receive 51% of the league’s basketball-related income. Contrary to popular belief, collective bargaining is intended to bring order — not chaotic threats of work stoppages — to management–labor relationships, which helps explain why previous physician strikes have had no discernable effect on health care outcomes.1