AMNews: Oct. 13, 2003. Harvard economist argues that Match is not anticompetitive ... American Medical News

Harvard economist argues that Match is not anticompetitive

Lawyers for plaintiffs in Match antitrust lawsuit cite other studies suggesting that matching systems do depress wages.

By Myrle Croasdale, AMNews staff. Oct. 13, 2003.

The National Resident Matching Program is not the culprit behind residents' relatively low wages, says Alvin Roth, PhD, a Harvard University economist and author of the Match's mathematical formula that links medical students with residencies.

Dr. Roth argued his perspective, which is contrary to claims made in an ongoing lawsuit against the Match, in an economic analysis in the Sept. 3 issue of the Journal of the American Medical Association. "The scientific hypothesis seems to say matches per se lower wages, and [the economic analysis] seems to say strongly that that hypothesis is false," Dr. Roth said.

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In May 2002, three residents filed a lawsuit alleging that the Match artificially depresses resident wages and restrains competition. The plaintiffs are seeking class-action status for all residents in the country.

Dr. Roth and his co-author looked at fellowship salaries to test the premise that abandoning the Match would cause resident salaries to rise. Internal medicine subspecialty programs within the same hospitals were compared. Some of the subspecialty programs participated in the Medical Specialties Matching Program, while others did not.

"Unlike residency training, fellowships are an optional part of a career path," Dr. Roth and his co-author stated. "Thus, potential fellows have market alternatives; fellowship programs must compete not only with other programs, but with less-specialized medical positions, because fellows could practice medicine without pursuing a fellowship."

They found that wages were not significantly different for programs that used the Match compared with those that did not. Fellows had the choice of going into higher-paying practices, but fellowship wages did not rise to make the positions more attractive. This suggests that the matching process is unrelated to the relatively low wages involved, Dr. Roth said.

Attorneys for the three physicians who brought the suit countered that other economic models show that matching systems do depress wages.

Sherman Marek, one of the attorneys representing the plaintiffs, said, "Our economic experts simply disagree with [Dr.] Roth. Their own comprehensive analyses conclude that the [Match] is an important element of a greater anticompetitive scheme that depresses and standardizes resident wages. ... Our experts' conclusions are consistent with economic theory and antitrust law generally, which hold that 'horizontal market division' or 'horizontal customer allocation' schemes [like a match] unlawfully impact pricing."

Dr. Roth responded that the theoretical papers he was aware of examined models that looked at matching but were not necessarily applicable to medicine.

ADDITIONAL INFORMATION:

Suit promises to be costly

Litigating class-action lawsuits gets expensive, and with 36 defendants named in the antitrust lawsuit against the National Resident Matching Program, this case should be no exception.

Almost all of the academic medical centers and physician organizations named in the lawsuit have sought their own outside counsel instead of having one law firm represent them as a group. Lawyers associated with the case say more than 90 attorneys are involved.

Once the case moves actively into the discovery phase, legal fees alone could mount to $500,000 a year for the defendants as a group, one attorney estimated.

Frances Miller, a professor at Boston University School of Law, said, "There are so many defendants. Regardless of the outcome, the litigation costs are high even if it never comes to trial."

Legal fees will be just one cost.

"The amount of diverted effort is enormous on leaders and their staff," said Jordan Cohen, MD, president of the Assn. of American Medical Colleges. "It's a terrible drain on already stretched resources that could otherwise be applied to health care and education."

If the plaintiffs win, the medical centers may end up paying billions to residents in back wages.

In an effort to find relief outside of the courts, the AAMC is lobbying Capitol Hill for an exemption for the Match from antitrust laws. But legal experts say similar efforts in the past have not been successful.

The suit was filed in May 2002. Motions to dismiss the case were heard in February 2003, and a ruling has not been issued. The case has a tentative trial date in 2006.

Weblink

Information on class-action lawsuit (www.residentcase.com)

Match statement on litigation (www.nrmp.org/memo_litigation.html)

"Relationship Between Wages and Presence of a Match in Medical Fellowships," JAMA, Sept. 3 (jama.ama-assn.org/cgi/content/full/290/9/1153)

"Matching and Price Competition" FTC seminar, April 14, in pdf (www.ftc.gov/be/seminardocs/matching.pdf)

"Wage Formation in a Centralized Matching Market" International Economic Review, February 1998 (econpapers.hhs.se/article/ieriecrev/v_3a39_3ay_3a1998_3ai_3a1_3ap_3a33-53.htm)

RELATED CONTENT  You may also be interested in reading:
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Harvard economist argues that Match is not anticompetitive

Lawyers for plaintiffs in Match antitrust lawsuit cite other studies suggesting that matching systems do depress wages.

ADDITIONAL INFORMATION:

Suit promises to be costly

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PROFESSIONAL ISSUES

Harvard economist argues that Match is not anticompetitive

Lawyers for plaintiffs in Match antitrust lawsuit cite other studies suggesting that matching systems do depress wages.

ADDITIONAL INFORMATION:

Suit promises to be costly

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In PROFESSION

In other SECTIONS

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