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I think it is sad that the NRMP match process is basically one of only two entities (the other being major league baseball) in the entire country who have been exempted from the Sherman Antitrust Act which was passed in 1890 to prohibit abusive monopolies link: http://www.linfo.org/sherman.html
A. The Jung Case
A group of residents, interns, and fellows challenged the NRMP and
member academic hospitals alleging that the hospitals and the NRMP
violated § 1 of the Sherman Antitrust Act.
' The complaint was filed by aggravated residents and interns on May 5, 2002 in the District of
Columbia. The residents claimed that academic hospitals and the nonprofit matching program colluded to keep resident salaries artificially low and resident working conditions similarly taxing. The residents argued that the match program along with participating academic hospitals
perpetuated an anti-competitive program which constituted an unreasonable
restraint on trade. '
"The match" is responsible for the placement of 23,000 graduating medical students in residency programs across the country When medical students participate in the match program they agree to honor the match commitment, thereby locking them into whichever residency
program a computer selects for them. This program leaves interns and residents with little bargaining power. This Comment will not analyze the antitrust jurisprudence that relates
to the NRMP challenge, but instead will focus on the response of Congress to the Jung complaint. Generally, the complainants alleged that the match program involves horizontal restraints on price or salaries of residents. These particular restraints are generally regarded as per se violations of the Sherman Act 86 "because of their pernicious effect on competition and lack
of any redeeming virtue." '
However, few cases present such overtly anti-competitive effects as to trigger the per se illegality rule. For other cases, courts will apply the "rule of reason" test to an alleged anti-competitive industry. This rule analyzes "whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may
suppress or even destroy competition. "Under this rule, after a plaintiff alleges anti-competitive effects of a particular industry, the court will then analyze the market to determine if the defendant's behavior provides any pro-competitive effects on the market.
Courts have developed a third test, known as the "quick look" test to evaluate a restraint that appears obviously anti-competitive. When courts apply the "quick look" test, a plaintiff does not have an initial burden of proving anti-competitive effects of a restraint, but the court presumes such effects. The defendant then has an opportunity to rebut the presumption
of unreasonable restraint on trade by proffering legitimate justifications or pro-competitive reasons for the restraint. If these justifications appear plausible, the court will use the full "rule of reason" analysis; otherwise, it will censure the practice.
The Jung court did not reach a full antitrust analysis of the NRMP. The court dismissed the action because Congress had secretly passed 15 U.S.C. § 37b(b)(2), retroactively preempting any
antitrust actions against the NRMP.
Congress titled 15 U.S.C. § 37b "Confirmation of anti-trust status of graduate medical resident matching programs. The legislation states as follows:
Antitrust lawsuits challenging the matching process, regardless of their merit or lack thereof, have the potential to undermine this highly efficient, pro-competitive, and long-standing process. The costs of defending such litigation would divert the scarce resources of our country's teaching hospitals and medical schools from their crucial missions of patient care, physician training, and medical research. In addition, such costs may lead to abandonment of the matching process, which has effectively served the interests of medical students, teaching hospitals, and
patients for over half a century.
The President signed this legislation into law as part of the Pension Funding Equity Act of 2004. The legislation thus formed a prime example of pork barrel legislation tacked onto a bill which was intended to update interest rates for the purposes of reducing employer contributions to pension funds.'' As the bill went into conference meetings, the above
rider did not exist.
In fact, a few senators objected staunchly to this seemingly unrelated rider. Senator Bingaman (D-New Mexico) who sits on the Health, Education, Labor, and Pensions Committee commented:
[T]here were provisions included in this bill-at least one provision that I think is highly objectionable.
Section 207 of the conference report creates an antitrust exemption for the graduate medical residency program that currently assigns medical students to hospitals where they are
required to work for 60 to 100 hours per week for an average of $9 or $10 an hour. To people who are not familiar with the way this place functions in recent years, they would be surprised to
find that we have written into the pension bill a retroactive exemption from the antitrust laws related to this issue of medical residency programs
That being said, the antitrust exemption that is established by subsection (b)(2) raises grave constitutional concerns. There has been no justification presented to this Congress, to any
committee of this Congress for depriving medical residents of the same protections under the antitrust laws that are enjoyed by other workers and other Americans. I do not see how it is
constitutionally permissible to take away the equal protection and the due process rights of medical residents without any showing that is necessary or beneficial.
Frankly, this is outrageous for Congress to be legislating in this way, without any hearings, without any testimony, without any knowledge of what it is doing.
The reason we have debate on the Senate floor is to allow Members to express views when we are getting ready to change the law. This is a time-honored process. It is one that was not
honored in this case. As far as I know, there has been no debate on the floor nor has there been debate in committee about this issue.
This is a provision that was added in a conference, without participation of Democratic Senators, and clearly it is contrary to good policy and to proper procedure here in the Senate.
Thus, controversy enveloped the passing of this legislation, and it is doubtful the rider would have existed without intense lobbying efforts from the NRMP, ACGME, and participating hospitals.
The AAMC, the representative body of all accredited medical schools in the United States and Canada, as well as over 400 teaching hospitals, vehemently opposed all resident unionization efforts. Coincidentally, the AAMC, named as one of the defendants in the Jung suit, stepped up its lobbying efforts after Jung filed suit and expressed uncompromising support for the above amendment. Allowing the unraveling of the match would greatly diminish the AAMC's power over post-graduate medical training. It comes as no surprise that the AAMC would oppose every effort
of house-staff to achieve more control over the process of resident placement. Offering more labor rights to medical residents would cost academic hospitals inordinate amounts of money. The cost of replacing one surgical resident with a "physician extender," or other physician, is
$210,000 to $315,000 a year. In addition, residents perform many responsibilities generally assignable to other hospital faculty, which allows hospitals to offer less privileges or compensation to some faculty members.'
http://www.law.upenn.edu/journals/jbl/articles/volume8/issue2/Geiger8U.Pa.J.Lab.&Emp.L.523(2006).pdf
Comment: The granting of the antitrust exemption helps to preserve a system of cheap (with CMS funding) and exploitable resident labor with no real bargaining power. I agree with Senator Bingamin's statement: "I do not see how it is constitutionally permissible to take away the equal protection and the due process rights of medical residents without any showing that is necessary or beneficial".
A. The Jung Case
A group of residents, interns, and fellows challenged the NRMP and
member academic hospitals alleging that the hospitals and the NRMP
violated § 1 of the Sherman Antitrust Act.
' The complaint was filed by aggravated residents and interns on May 5, 2002 in the District of
Columbia. The residents claimed that academic hospitals and the nonprofit matching program colluded to keep resident salaries artificially low and resident working conditions similarly taxing. The residents argued that the match program along with participating academic hospitals
perpetuated an anti-competitive program which constituted an unreasonable
restraint on trade. '
"The match" is responsible for the placement of 23,000 graduating medical students in residency programs across the country When medical students participate in the match program they agree to honor the match commitment, thereby locking them into whichever residency
program a computer selects for them. This program leaves interns and residents with little bargaining power. This Comment will not analyze the antitrust jurisprudence that relates
to the NRMP challenge, but instead will focus on the response of Congress to the Jung complaint. Generally, the complainants alleged that the match program involves horizontal restraints on price or salaries of residents. These particular restraints are generally regarded as per se violations of the Sherman Act 86 "because of their pernicious effect on competition and lack
of any redeeming virtue." '
However, few cases present such overtly anti-competitive effects as to trigger the per se illegality rule. For other cases, courts will apply the "rule of reason" test to an alleged anti-competitive industry. This rule analyzes "whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may
suppress or even destroy competition. "Under this rule, after a plaintiff alleges anti-competitive effects of a particular industry, the court will then analyze the market to determine if the defendant's behavior provides any pro-competitive effects on the market.
Courts have developed a third test, known as the "quick look" test to evaluate a restraint that appears obviously anti-competitive. When courts apply the "quick look" test, a plaintiff does not have an initial burden of proving anti-competitive effects of a restraint, but the court presumes such effects. The defendant then has an opportunity to rebut the presumption
of unreasonable restraint on trade by proffering legitimate justifications or pro-competitive reasons for the restraint. If these justifications appear plausible, the court will use the full "rule of reason" analysis; otherwise, it will censure the practice.
The Jung court did not reach a full antitrust analysis of the NRMP. The court dismissed the action because Congress had secretly passed 15 U.S.C. § 37b(b)(2), retroactively preempting any
antitrust actions against the NRMP.
Congress titled 15 U.S.C. § 37b "Confirmation of anti-trust status of graduate medical resident matching programs. The legislation states as follows:
Antitrust lawsuits challenging the matching process, regardless of their merit or lack thereof, have the potential to undermine this highly efficient, pro-competitive, and long-standing process. The costs of defending such litigation would divert the scarce resources of our country's teaching hospitals and medical schools from their crucial missions of patient care, physician training, and medical research. In addition, such costs may lead to abandonment of the matching process, which has effectively served the interests of medical students, teaching hospitals, and
patients for over half a century.
The President signed this legislation into law as part of the Pension Funding Equity Act of 2004. The legislation thus formed a prime example of pork barrel legislation tacked onto a bill which was intended to update interest rates for the purposes of reducing employer contributions to pension funds.'' As the bill went into conference meetings, the above
rider did not exist.
In fact, a few senators objected staunchly to this seemingly unrelated rider. Senator Bingaman (D-New Mexico) who sits on the Health, Education, Labor, and Pensions Committee commented:
[T]here were provisions included in this bill-at least one provision that I think is highly objectionable.
Section 207 of the conference report creates an antitrust exemption for the graduate medical residency program that currently assigns medical students to hospitals where they are
required to work for 60 to 100 hours per week for an average of $9 or $10 an hour. To people who are not familiar with the way this place functions in recent years, they would be surprised to
find that we have written into the pension bill a retroactive exemption from the antitrust laws related to this issue of medical residency programs
That being said, the antitrust exemption that is established by subsection (b)(2) raises grave constitutional concerns. There has been no justification presented to this Congress, to any
committee of this Congress for depriving medical residents of the same protections under the antitrust laws that are enjoyed by other workers and other Americans. I do not see how it is
constitutionally permissible to take away the equal protection and the due process rights of medical residents without any showing that is necessary or beneficial.
Frankly, this is outrageous for Congress to be legislating in this way, without any hearings, without any testimony, without any knowledge of what it is doing.
The reason we have debate on the Senate floor is to allow Members to express views when we are getting ready to change the law. This is a time-honored process. It is one that was not
honored in this case. As far as I know, there has been no debate on the floor nor has there been debate in committee about this issue.
This is a provision that was added in a conference, without participation of Democratic Senators, and clearly it is contrary to good policy and to proper procedure here in the Senate.
Thus, controversy enveloped the passing of this legislation, and it is doubtful the rider would have existed without intense lobbying efforts from the NRMP, ACGME, and participating hospitals.
The AAMC, the representative body of all accredited medical schools in the United States and Canada, as well as over 400 teaching hospitals, vehemently opposed all resident unionization efforts. Coincidentally, the AAMC, named as one of the defendants in the Jung suit, stepped up its lobbying efforts after Jung filed suit and expressed uncompromising support for the above amendment. Allowing the unraveling of the match would greatly diminish the AAMC's power over post-graduate medical training. It comes as no surprise that the AAMC would oppose every effort
of house-staff to achieve more control over the process of resident placement. Offering more labor rights to medical residents would cost academic hospitals inordinate amounts of money. The cost of replacing one surgical resident with a "physician extender," or other physician, is
$210,000 to $315,000 a year. In addition, residents perform many responsibilities generally assignable to other hospital faculty, which allows hospitals to offer less privileges or compensation to some faculty members.'
http://www.law.upenn.edu/journals/jbl/articles/volume8/issue2/Geiger8U.Pa.J.Lab.&Emp.L.523(2006).pdf
Comment: The granting of the antitrust exemption helps to preserve a system of cheap (with CMS funding) and exploitable resident labor with no real bargaining power. I agree with Senator Bingamin's statement: "I do not see how it is constitutionally permissible to take away the equal protection and the due process rights of medical residents without any showing that is necessary or beneficial".
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