AMA Rejects Loan for Doctors Union

CHICAGO --The American Medical Assn. board has rejected a $1.6-million loan request from its pioneering doctors union, touching off a battle for its survival.

Dr. Mark Fox, president of the union, Physicians for Responsible Negotiation, said Thursday that the board’s move was unexpected and “has really cut the legs off the organization.”

“Since the AMA has been our sole source of funding, at this point it puts us in a bind,” Fox said. He said the union’s money probably will run out this summer.

Medical societies in several states have drafted resolutions seeking to overturn the board’s decision. The union’s fate could be determined at the AMA’s annual meeting next month.

The board vote came April 18 with no explanation, said Fox, who speculated that it stems from the AMA’s own financial problems.

Dr. J. Edward Hill, the AMA board of trustees’ chairman-elect, said the rejection was based on PRN’s uncertain future, suggesting that the board doubted the union’s ability to repay a loan. He described the AMA’s own finances as stable.

“As a separate independent organization, PRN has the option of pursuing other sources of outside funding,” AMA board chairman Dr. Timothy Flaherty said.

The AMA formed PRN in 1999 to help give doctors more leverage against managed care; the union is against strikes, however.

It has more than 200 individual members and about a dozen group members.

Its success has been mixed, however, and two key organizing efforts involving residents at a suburban Chicago hospital and a group of New Jersey doctors have stalled.

Employers in both cases are disputing the groups’ right to organize, and decisions are pending with the National Labor Relations Board, Fox said.

The union has received a little more than $2 million in loans from the AMA since its inception. Fox said its loan request last month was designed to keep the group afloat through 2003.

“The original understanding that PRN had with the board was that it would probably take us about five years to do enough business to sustain us,” he said.