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I'm not sure if this topic is brought up yet, but this is an article from the NY times. I figured it would be very relevant to us in the future and may change the Match, how competitive residencies will be, and how limited it might be. Let me hear your thoughts. Thanks.
Medical Students Sue Over Residency System
New York Times, May 7, 2002
Every March, graduating medical school students wait anxiously for
Match Day, when a computer tells them where they will spend the next
several years as medical residents in teaching hospitals.
A class-action lawsuit to be filed in Washington today challenges the
matching program on antitrust grounds. The suit says the defendants,
including seven medical organizations and more than 1,000 private
hospitals, have used the program to keep residents' wages low and
hours long. Almost all first-year residents make less than $40,000 a
year and often work 100-hour weeks.
If the suit is successful, the nation's health care system faces an
enormous financial liability and the prospect of being forced to
change the way that generations of doctors have been trained.
More than 80 percent of first-year residency positions are offered
exclusively through the program, known formally as the National
Resident Matching Program. The matches are based on ranked lists
submitted by hospitals and the 15,000 or so students, and both sides
agree in advance to accept the match.
There is no room for negotiations about wages, hours or other terms
of employment. As a consequence, the plaintiffs say, the hospitals,
which share detailed salary information with each other, can force
residents to accept below-market wages for the three to eight years,
depending on specialty, of their residencies.
"The match basically controls where you are going to spend the first
part of your professional life," said Dr. Paul Jung, one of the
plaintiffs, who is now a fellow at Johns Hopkins University. Yet, he
said, "you're expressly forbidden from having any kind of agreement
about any kind of salary or anything."
Lloyd Constantine, who was New York's top antitrust official for a
decade and is not involved in the suit, said the case raised
important issues. "If this were coal or steel or autos, it would flat
out be a felony and would probably be prosecuted criminally," he said
of the matching system.
Alvin Roth, an economics professor at Harvard, redesigned the system
in 1997. He said it merely ensured that medical students obtain the
best residencies they could. This fosters competition, he said, which
the antitrust laws are meant to protect.
But James F. Blumstein, an expert in health care regulation at
Vanderbilt Law School in Nashville, said that the matching
program "does prevent competition in the sense that you can't
entertain competing offers."
"It's not only salaries but also access to opportunities," he
said. "It's hard to see what the pro-competitive justification is
here."
Defenders of the matching program say that it is a mistake to think
about it in purely commercial terms. They say residencies serve an
important social purpose in training doctors and providing care for
patients. Whether the antitrust laws should take account of these
kinds of arguments is the subject of debate.
"It's not exactly a job, it's a continuation of a medical education,"
said Kevin Jon Williams, a professor of medicine at Thomas Jefferson
University in Philadelphia, who has written extensively on the
matching program.
Sherman Marek, a Chicago lawyer whose law firm, along with 14 others,
represents the plaintiffs, said there was nothing special about jobs
that educate. "In any employment, the employee is acquiring skills
that can then be taken elsewhere, so there is always an education
element," he said. "Nevertheless, market forces are allowed to
operate."
Lawyers for the plaintiffs declined to speculate on how much
residents' salaries might change if the matching program were
eliminated.
Representatives of the medical organizations declined to comment on
the lawsuit or did not return calls.
Residents' wages are certainly both low for the profession and
uniform. According to the Association of American Medical Colleges,
which operates the program and is a defendant in the suit, the
average first-year resident, having completed four years of medical
school, is paid $37,383. In the Northeast, the average is $39,060; in
the South, the average is $35,552.
Hundred-hour workweeks for residents are common, meaning that they
often make less than $10 an hour.
"They get less money than nurses and physician's assistants," said
Michael J. Freed, a lawyer for the plaintiffs.
The plaintiffs' legal papers say the uniformity of the wages proves
that something is wrong.
"Employers pay residents standardized salaries, regardless of such
factors as program prestige, medical specialty, geographic location,
resident merit and year of employment," the papers argue. "With few
exceptions, employers pay salaries very close to the national average
and very close to each other. By contrast, post-residency physicians
earn widely varying compensations based on these factors, especially
geographic location and medical specialty."
But Professor Roth, the system designer, said the similarities in
wages by themselves prove nothing. "If you're looking at prices, both
competition and collusion look similar," he said. Moreover, "people
would be willing to pay to take these slots," he said, referring to
the most desirable positions.
George L. Priest, a professor at Yale Law School who was a consultant
to the plaintiffs, disagreed. "The salary data is highly suspicious,"
he said. "There is no good reason why doctors after four years of
graduate school should make a quarter of what lawyers make."
The low wages and long hours have serious consequences, Dr. Jung
said. "I had to constantly battle fatigue as a factor affecting the
quality of my life and the lives of my patients," he said.
Dr. Jung, 32, said his residency at the MetroHealth Medical Center in
Cleveland was dispiriting.
Hospitals "use residents as cheap labor," he said. "I had the
expectation, maybe na?vely, that a lot of time would be spent with
patients."
Instead, Dr. Jung said, he performed many menial and administrative
tasks. "It was a lot more hours and a lot less patient care than I
expected," he said.
He added: "Residents want to be treated fairly, and patients want to
be treated well. Patient care will improve if you let residents have
more say in their working conditions."
The Justice Department looked into the residency matching program in
the mid-1990's. It reached a settlement with an association that
administered a separate program for family practice residencies, but
did not challenge the main program. Professor Roth said this meant
the government had given the hospital matching program "a clean bill
of health."
Mr. Constantine said that the professional training aspect of
residents' work made it difficult to predict the outcome of the
case. "There is a level of sentimentality" among judges, he
said. "They will listen to excuses they would not listen to in the
context of a purely commercial situation," he said.
Professor Blumstein said those excuses should not play a role in
antitrust analysis. "The better view and the correct view is that
antitrust law does not allow for worthy purposes to offset the
anticompetitive actions," he said.
The closest analogy, Mr. Constantine said, is the civil suit that the
federal government brought a decade ago against the eight Ivy League
colleges and the Massachusetts Institute of Technology challenging
their cooperation in setting student financial aid. The case ended in
settlements that limited the amount of information the institutions
could share.
Such information sharing is even more problematic when salaries are
involved, he said. "The medical world really is closer to coal, steel
and autos than to colleges giving out financial aid," he said.
Critics compare the residency matching program to early decision
programs at colleges. They say that colleges accepting applicants
through early decision can offer less attractive financial aid
packages because there is no competition for those students, just as
hospitals can pay residents low wages because they have nowhere else
to go.
The stakes in the new suit are high. The complaint does not specify
how much money the plaintiffs seek, but they claim to represent a
class of 200,000 residents. If residents' fair market salaries were
determined to be $100,000, say, the sums at issue for a single year
would exceed $12 billion, and since this is an antitrust case, the
damages would be automatically tripled.
"It's not obvious that it's in the interests of the plaintiffs to
bankrupt every hospital in the country," Professor Priest said. "But
it's going to change the nature of medical care. They are going to
have to bid for the services of these medical residents, and they
won't be able to work them 120 hours a week."
Medical Students Sue Over Residency System
New York Times, May 7, 2002
Every March, graduating medical school students wait anxiously for
Match Day, when a computer tells them where they will spend the next
several years as medical residents in teaching hospitals.
A class-action lawsuit to be filed in Washington today challenges the
matching program on antitrust grounds. The suit says the defendants,
including seven medical organizations and more than 1,000 private
hospitals, have used the program to keep residents' wages low and
hours long. Almost all first-year residents make less than $40,000 a
year and often work 100-hour weeks.
If the suit is successful, the nation's health care system faces an
enormous financial liability and the prospect of being forced to
change the way that generations of doctors have been trained.
More than 80 percent of first-year residency positions are offered
exclusively through the program, known formally as the National
Resident Matching Program. The matches are based on ranked lists
submitted by hospitals and the 15,000 or so students, and both sides
agree in advance to accept the match.
There is no room for negotiations about wages, hours or other terms
of employment. As a consequence, the plaintiffs say, the hospitals,
which share detailed salary information with each other, can force
residents to accept below-market wages for the three to eight years,
depending on specialty, of their residencies.
"The match basically controls where you are going to spend the first
part of your professional life," said Dr. Paul Jung, one of the
plaintiffs, who is now a fellow at Johns Hopkins University. Yet, he
said, "you're expressly forbidden from having any kind of agreement
about any kind of salary or anything."
Lloyd Constantine, who was New York's top antitrust official for a
decade and is not involved in the suit, said the case raised
important issues. "If this were coal or steel or autos, it would flat
out be a felony and would probably be prosecuted criminally," he said
of the matching system.
Alvin Roth, an economics professor at Harvard, redesigned the system
in 1997. He said it merely ensured that medical students obtain the
best residencies they could. This fosters competition, he said, which
the antitrust laws are meant to protect.
But James F. Blumstein, an expert in health care regulation at
Vanderbilt Law School in Nashville, said that the matching
program "does prevent competition in the sense that you can't
entertain competing offers."
"It's not only salaries but also access to opportunities," he
said. "It's hard to see what the pro-competitive justification is
here."
Defenders of the matching program say that it is a mistake to think
about it in purely commercial terms. They say residencies serve an
important social purpose in training doctors and providing care for
patients. Whether the antitrust laws should take account of these
kinds of arguments is the subject of debate.
"It's not exactly a job, it's a continuation of a medical education,"
said Kevin Jon Williams, a professor of medicine at Thomas Jefferson
University in Philadelphia, who has written extensively on the
matching program.
Sherman Marek, a Chicago lawyer whose law firm, along with 14 others,
represents the plaintiffs, said there was nothing special about jobs
that educate. "In any employment, the employee is acquiring skills
that can then be taken elsewhere, so there is always an education
element," he said. "Nevertheless, market forces are allowed to
operate."
Lawyers for the plaintiffs declined to speculate on how much
residents' salaries might change if the matching program were
eliminated.
Representatives of the medical organizations declined to comment on
the lawsuit or did not return calls.
Residents' wages are certainly both low for the profession and
uniform. According to the Association of American Medical Colleges,
which operates the program and is a defendant in the suit, the
average first-year resident, having completed four years of medical
school, is paid $37,383. In the Northeast, the average is $39,060; in
the South, the average is $35,552.
Hundred-hour workweeks for residents are common, meaning that they
often make less than $10 an hour.
"They get less money than nurses and physician's assistants," said
Michael J. Freed, a lawyer for the plaintiffs.
The plaintiffs' legal papers say the uniformity of the wages proves
that something is wrong.
"Employers pay residents standardized salaries, regardless of such
factors as program prestige, medical specialty, geographic location,
resident merit and year of employment," the papers argue. "With few
exceptions, employers pay salaries very close to the national average
and very close to each other. By contrast, post-residency physicians
earn widely varying compensations based on these factors, especially
geographic location and medical specialty."
But Professor Roth, the system designer, said the similarities in
wages by themselves prove nothing. "If you're looking at prices, both
competition and collusion look similar," he said. Moreover, "people
would be willing to pay to take these slots," he said, referring to
the most desirable positions.
George L. Priest, a professor at Yale Law School who was a consultant
to the plaintiffs, disagreed. "The salary data is highly suspicious,"
he said. "There is no good reason why doctors after four years of
graduate school should make a quarter of what lawyers make."
The low wages and long hours have serious consequences, Dr. Jung
said. "I had to constantly battle fatigue as a factor affecting the
quality of my life and the lives of my patients," he said.
Dr. Jung, 32, said his residency at the MetroHealth Medical Center in
Cleveland was dispiriting.
Hospitals "use residents as cheap labor," he said. "I had the
expectation, maybe na?vely, that a lot of time would be spent with
patients."
Instead, Dr. Jung said, he performed many menial and administrative
tasks. "It was a lot more hours and a lot less patient care than I
expected," he said.
He added: "Residents want to be treated fairly, and patients want to
be treated well. Patient care will improve if you let residents have
more say in their working conditions."
The Justice Department looked into the residency matching program in
the mid-1990's. It reached a settlement with an association that
administered a separate program for family practice residencies, but
did not challenge the main program. Professor Roth said this meant
the government had given the hospital matching program "a clean bill
of health."
Mr. Constantine said that the professional training aspect of
residents' work made it difficult to predict the outcome of the
case. "There is a level of sentimentality" among judges, he
said. "They will listen to excuses they would not listen to in the
context of a purely commercial situation," he said.
Professor Blumstein said those excuses should not play a role in
antitrust analysis. "The better view and the correct view is that
antitrust law does not allow for worthy purposes to offset the
anticompetitive actions," he said.
The closest analogy, Mr. Constantine said, is the civil suit that the
federal government brought a decade ago against the eight Ivy League
colleges and the Massachusetts Institute of Technology challenging
their cooperation in setting student financial aid. The case ended in
settlements that limited the amount of information the institutions
could share.
Such information sharing is even more problematic when salaries are
involved, he said. "The medical world really is closer to coal, steel
and autos than to colleges giving out financial aid," he said.
Critics compare the residency matching program to early decision
programs at colleges. They say that colleges accepting applicants
through early decision can offer less attractive financial aid
packages because there is no competition for those students, just as
hospitals can pay residents low wages because they have nowhere else
to go.
The stakes in the new suit are high. The complaint does not specify
how much money the plaintiffs seek, but they claim to represent a
class of 200,000 residents. If residents' fair market salaries were
determined to be $100,000, say, the sums at issue for a single year
would exceed $12 billion, and since this is an antitrust case, the
damages would be automatically tripled.
"It's not obvious that it's in the interests of the plaintiffs to
bankrupt every hospital in the country," Professor Priest said. "But
it's going to change the nature of medical care. They are going to
have to bid for the services of these medical residents, and they
won't be able to work them 120 hours a week."
