The Truth About “Daniel et al. vs. ABEM”

Posted: March 11, 2009 by Doc in Emergency Medicine
Tags: , , ,


Misconceptions in the Emergency Medicine community regarding the now legendary case of “Daniel, et al. vs. ABEM” have been running rampant. Chief among these are:
1. that Dr. Daniel and AAPS were working together in this case
2. that the end of the Daniel case vindicates ABEM and that no antitrust violation occurred
3. that the end of the Daniel case means that for now and the future, only EM residency trained physicians can practice Emergency Medicine

Before explaining why these are misconceptions, let us first read what actually happened in “Daniel et al. vs. ABEM”
(Excerpted from “Antitrust: Emergency Medicine Physicians Lack Standing to Bring Antitrust Action” by Sarah Gasper in American Journal of Law and Medicine)
Dr. Gregory Daniel and 175 other named plaintiffs, along with approximately 14,000 members of the proposed plaintiff class were physicians who currently practice or who have practiced emergency medicine and who would be eligible to take the ABEM exam if the practice track still existed.18 Plaintiffs alleged that by closing the practice track and placing a premium on ABEM certification, ABEM, CORD, numerous hospitals, and various individuals associated with these organizations unlawfully restrained trade and monopolized the market for ABEM-certified and ABEM-eligible physicians.19 Specifically, plaintiffs argued that the defendants conspired to limit the pool of eligible applicants, thus creating an artificial shortage of ABEM-certified and ABEM-eligible physicians, with the end goal of demanding super-competitive pay.20 While other boards certify physicians in emergency medicine,21 the plaintiffs asserted that the ABEM certification is the most prestigious, that some hospitals only hire ABEM-certified physicians, and that some hospitals base compensation and promotion decisions on ABEM certification. As a result, plaintiffs asserted they receive “substantially less remuneration than ABEM-certified physicians” and that they continue to suffer loss of income.23 Furthermore, plaintiffs assert that they have been denied positions solely by reason of not being ABEM-certified or ABEM-eligible and that some were discharged, demoted, and assigned to undesirable work situations due to the lack of ABEM certification.24 Finally, plaintiffs claimed that CORD had a specific interest in keeping the formal residency training as the required path to ABEM certification.25

Court Decision:
In declaring that the plaintiffs lacked antitrust standing, the Court noted that even if a private party is injured by a violation of antitrust laws, the party must still have standing to bring a claim.37 The Court identified four relevant factors for determining antitrust standing38 and focused on two: the alleged antitrust injury and efficient enforcement of these claims.39 The plaintiffs here alleged financial injury due to ABEM restricting the number of eligible physicians that take the certification exam, which in turn limits the number of such doctors and allows the certified doctors to charge higher costs.40 However, as the Court summarized, the plaintiffs’ “theory of injury is not simply that ABEM-certified doctors command supercompetitive remuneration; their injury is the inability to do likewise.”41 The plaintiffs did not attempt to remove the residency track requirement, nor did they allege that they would have received the same pay but for ABEM’s domination of the market.42 Rather, the plaintiffs sued “only to restore-temporarily-the practice track as an alternative to residency training so that they can qualify for the ABEM exam, after which they are satisfied to have the certification door shut on any other test applicants.”43 The Court noted that the plaintiffs could not state an antitrust injury “when their purpose is to join the cartel rather than disband it.”44
In addition, the Court noted that even if the plaintiffs did have a viable antitrust injury, these plaintiffs are not the best enforcers for the alleged antitrust violation.45 As the District Court below found, these plaintiffs “have no natural economic self-interest in reducing the cost of emergency medical care.” 46 The Court emphasized that the relief pursued by the plaintiffs here is to gain entry into an exclusive arrangement that they otherwise seek to maintain in order to share in the supercompetitive remuneration allegedly made possible by ABEM exclusivity.47 Furthermore, the Court noted that both the individual emergency care patients, who rarely choose their emergency doctors, and the hospitals, who act both as consumers who pay for the emergency care and as suppliers of the residency training, are an unrealistic class of plaintiffs.48 On the other hand, the government and private health care insurers, who compensate hospitals for most emergency care, do have a direct and undivided economic interest in reducing the costs of emergency medical care as well as the necessary legal sophistication to challenge an antitrust violation.49 Ultimately the Court concluded that health care insurers would be the best enforcer of this antitrust challenge.50

Judge Katzmann concurred in part and dissented in part with the majority’s holding. While he agreed with the majority’s conclusions on personal jurisdiction, he believed plaintiffs had antitrust standing and would thus transfer the case.51 Katzmann found plaintiffs allegations sufficient to “allege losses stemming from a competition-reducing aspect or effect of the defendant’s behavior” because they allege that the defendants unreasonably restrained them from competing in the ABEM-certified market of physicians and consequently, the plaintiffs suffered financial losses.52 In addition, he argued that the plaintiffs’ remedy would actually benefit consumers because an increase in the number of ABEM-certified doctors could result in lower salaries for those doctors in general and thus lower costs for the consumers.53 Katzmann also disagreed with the majority’s conclusion that plaintiffs only want the practice track to be an option temporarily, indicating that the plaintiffs stated that they wanted the exam to be open to all class members, who, presently or with passage of time, would meet the practice track criteria.54 In sum, the plaintiffs did not seek to earn “super-competitive” wages, nor was their request for relief “inconsistent with their allegations that (1) prohibiting practice-track physicians from taking the certification exam is illegally anti-competitive and (2) the plaintiffs have suffered antitrust injury as a consequence.”55

***While this case does not rule affirmatively either way as to the allegation that closing the practice track was an antitrust violation,the second Circuit speculates that health care insurers, and not doctors, would be efficient enforcers of such an allegation.

It should be obvious from the above that misconception #1, that “Dr. Daniel was working with AAPS in the case” is completely untrue. In fact, AAPS had absolutely nothing to do with “Daniel et al. vs. ABEM”. Statements made by persons such as Dr. Antoine Kazzi, former president of the California Chapter and AAEM Board Director in EM News (“AAEM: Board Certification Under Attack in Florida” Emergency Medicine News:Volume 26(9)September 2004pp 1,46) and others stating this association reveal at the very least careless ignorance of the facts.
Misconception #2:
It should also be clear from the above that the decision in “Daniel et al. vs. ABEM” in no way, shape, or form vindicates ABEM’s actions. In fact, the decision states that upon reviewing the evidence, ABEM may very well be guilty of antitrust violations, however health care insurers, and not doctors should be the ones who should bring that claim to court. Judge Katzmann, who dissented in the opinion, argued that the plaintiffs’ remedy (allowing career EM physicians to take the ABEM certification exam) would actually benefit consumers because an increase in the number of ABEM-certified doctors could result in lower salaries for those doctors in general and thus lower costs for the consumers.

Misconception #3
that the end of the Daniel case means that for now and the future, only EM residency trained physicians can practice Emergency Medicine


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