Illustration by Sam Prickett.
There is, by design, a monopoly on medical regulation in Alabama, where the board of medical examiners is controlled by a private, nonprofit organization whose members actively participate in the market they are tasked with licensing and regulating.
Top members of MASA, the Medical Association of Alabama, account for all 16 seats on the Alabama Board of Medical Examiners and Medical Licensure Commission.
By having complete control over the medical examiners board, the physicians, obstetricians, optometrists, etc., who sit on the MASA 12-member “board of censors” along with four more officers within the organization, determine the direction of the licensing and regulation of Alabama’s medical marketplace. Beyond that, MASA, which was formed in 1850 and renewed its 501(c)(3) status in 1988, also controls 12 of the 16 seats on the Alabama Department of Public Health’s governing committee.
That means that two state agencies affecting the health of Alabama citizens are controlled by the same membership nonprofit. Those who serve on the board of censors are elected by members within the organization. As a former dermatologist, Governor Robert Bentley is a member of MASA, but does not serve in any other capacity, records indicate.
“Essentially, what we have here is a private, nonprofit organization whose mission it is to protect the bottom line of its 7,000 physician members overseeing the operation of a state governmental agency,” said Jennifer Crook, formerly a licensed midwife in Tennessee who now lives in Birmingham. As someone who would like to see her profession become licensed in the state, Crook said it’s frustrating to see this type of regulatory monopoly she referred to as “a textbook example of regulatory capture.”
Midwives in the state have indicated they are contemplating filing a federal antitrust case against the state agencies controlled by MASA, but the success of any such effort is far from clear. Midwives contend that having doctors in control of agencies that regulate midwifery — which is not legal in Alabama — is a conflict of interest since midwives would serve as competition for physicians and hospitals. They also argue that not having midwives in the state is a likely cause of the high infant mortality rates in Alabama.
An Alabama legislator who sponsored a law designed to protect state boards against just such federal claims nevertheless said he favors midwives. And attorneys in the state seem unclear on the midwives’ basic contention — that having MASA members controlling agencies regulating healthcare is an inherent conflict of interest.
The confusion in this issue connects both to the fact that Alabama frequently finds itself in the lower ranks of various standards of health and to the fact that the state recently has been embroiled in a number of high-profile cases involving allegations of unethical and even illegal behavior by public officials.
It is not unheard of to have medical experts serve on state boards, but a recent U.S. Supreme Court ruling has set a new precedent for antitrust violations against market participants acting on behalf of the state, particularly in situations when the board is controlled by a majority of these actors.
The case, North Carolina Board of Dental Examiners v. Federal Trade Commission (FTC), was brought before the Supreme Court after the FTC argued that the dental board was trying to drive unlicensed teeth-whitening services, commonly located in spas or shopping malls, out of business. Six of the eight members on the North Carolina Board of Dental Examiners, by statute, must be practicing dentists and, as the FTC argued, have financial interests in seeing teeth-whitening operations shut down.
As reported by The New York Times, several justices grappled with the conflicts of interest that arise when doctors can dictate the market, as was made apparent in the case brought before them.
“It seems to lead to a case-by-case, state-by-state, board-by-board inquiry by the federal courts as to whether the members of a regulatory body are really serving the public interest or whether they have been captured by some special interest,” Justice Samuel Alito Jr. said.
Justice Anthony Kennedy said, “If the board says we think what’s good for dentistry is good for North Carolina, our cases say that’s not enough because you’re pursuing your self-interest.”
So what does this mean for Alabama? Midwives argue that not being able to practice in Alabama is a result of having doctors, who have financial interests in making sure as many babies as possible are born in their hospitals, in control the board that is in charge of issuing licenses for midwives in Alabama. By statute, the ADPH is the regulatory board in charge of licensing midwives.
As reported by Al Jazeera America, “Until 1976, midwives were licensed in Alabama. But with the establishment of Medicaid in 1970, public health departments in the state slowly and unsystematically stopped issuing midwives licenses. Alabama does allow for certified nurse midwives, or CNMs, to collaborate with obstetricians to deliver babies in hospitals. Another class of midwives, known as certified professional midwives, or CPMs, are not licensed in Alabama or 21 other states.”
(Over the last century, the number of licensed professions in the United States has ballooned from 5 percent of the job market in the early 1900s to 30 percent of jobs in 1970, where the rate currently stands. Typically, as is the case with Alabama’s medical licensing, the regulations are couched in terms of public safety concerns.)
To understand why it matters that MASA members control the state licensing agency, consider the impact of the Supreme Court ruling in the North Carolina case. After the decision came down, Alabama legislators passed SB 104, a law designed to immunize state agencies from similar antitrust suits.
North Carolina Board of Dental Examiners v. FTC
Speaking over the phone from Washington D.C., Randy Stutz, general counsel for the American Antitrust Institute, said that structural conflicts exist within medical licensing boards throughout the country, as made evident by the recent Supreme Court ruling.
Beginning in 2003, the North Carolina dental board began issuing cease and desist letters to teeth-whitening kiosks and their landlords. The FTC filed a complaint against the board, “accusing it of anticompetitive behavior,” The New York Times reported. “The board responded that it was shielded from the complaint because it was a state agency incapable of violating the federal antitrust laws. The United States Court of Appeals for the Fourth Circuit, in Richmond, Virginia, rejected that contention, saying that a state agency ‘operated by market participants who are elected by other market participants is a private actor’ and is subject to the antitrust laws unless it is actively supervised by the state.”
Stutz said that antitrust can be a complicated area of law. “The issue that came up with the [North Carolina] dental case was whether or not a regulatory board, or licensing board that operates with state authority, can be sued by a plaintiff for an antitrust violation, and the issue is whether such organization is immune from the lawsuit because it is a state entity,” Stutz said. “Essentially when a state legislature passes a law, a plaintiff can’t sue them because of state sovereign immunity, or 11th-amendment immunity. But when substate entities — not state legislature, not the court, but another arm of state government — acts, whether they’re immune, there is another test. It’s called the state action doctrine.”
In the court’s amicus curiae brief, written by antitrust scholars in support of the respondents, the authors posited this example:
“Suppose, for example, that California decided it wanted to allow Hollywood movie producers to fix prices or to exclude TV movie producers, contrary to federal antitrust law. Under Petitioner’s approach, California could do so by simply appointing their CEOs to a state agency that sets movie prices or that decides who can make movies and giving it the sorts of enforcement authority, duties, and oversight that North Carolina gave its dental board. This is because Petitioner makes state agency status turn on whether the actor was (1) made a state agency, (2) given enforcement powers, and (3) required to submit annual reports and be subject to legislative oversight and judicial review. All three factors would be equally met in this hypothetical.”
The Supreme Court agreed with the FTC. What happened in the wake of this was a lot of political fallout, Stutz explained — including in Alabama.
“A lot of states are concerned that their boards — it’s not an uncommon thing to want experts on these boards; you want people who are knowledgeable, who can make judgements on whether or not a doctor is qualified to practice medicine — could be open to a lawsuit and a lot of them have passed statutes like [SB 104],” he said. “They have a few options. They can restructure the boards so they are not made up of a controlling number of board members who are market participants. Because if they don’t make up a majority of the board, they are not at risk for antitrust liability.”
In Alabama, state legislators passed SB 104 earlier this year in response to the Supreme Court ruling, seeking to restrict the FTC from filing similar antitrust complaints.
Brian Hale, general counsel for the ADPH, said that the Supreme Court decision mainly applies to licensing boards — not the ADPH. “The licensing boards that this decision really primarily impacted are those boards that are made up of active market participants, but those boards also regulate the market they participate in. So it certainly impacts our board of medical examiners, primarily physicians regulating the practice of medicine,” Hale said.
However, as previously stated, the Alabama Board of Medical Examiners is made up entirely of active market participants who also serve as MASA’s board of censors and top leadership.
In regards to antitrust violations, Stutz believes that a nonprofit controlling a state regulatory board should raise questions with the FTC. “Anytime someone is in a position to control the shape and scope of a market or has regulatory powers to foreclose entry into their market, as is the case here, you have to be concerned about the conflict of interest,” Stutz said. “And are they looking out for the public interest or are they just trying to line their pockets. There should be some concern there.”
“Prioritize patient safety and wellness”
State Sen. Jim McClendon, R-Springville, said he has long been an advocate for midwives in Alabama. But he sponsored SB 104 earlier this year, a bill aimed at granting immunity to the ADPH and similar state licensing boards controlled by active market participants. Asked what problem, specifically, SB 104 was designed to address, McClendon cited the case in North Carolina as the impetus for the legislation.
“[MASA] came to us with this bill as an attempt, and I don’t remember exactly what they did, to make sure their board of medical examiners would come in compliance with that ruling,” McClendon said. “The idea was to preempt a similar challenge to the board of medical examiners in Alabama… It has not been an issue before but they didn’t want it to become an issue based on the court case.”
MASA representatives did not return multiple calls seeking comment for this story. The same is true for the Alabama Board of Medical Examiners.
A look at the bill’s text, however, only seems to address one of the two requirements the Supreme Court argued must be met in order for state regulatory boards to be controlled by market participants.
“The Legislature finds and declares all of the following,” the bill reads. “(1) The power to make rules regulating the practice of medicine or osteopathy includes the power to prohibit unlicensed persons from practicing medicine or osteopathy and the power to regulate how licensed persons practice medicine or osteopathy. (2) A primary goal of the provision of health care is to prioritize patient safety and wellness. (3) The State Board of Medical Examiners and the Medical Licensure Commission are in the best position to determine the medical practices that prioritize patient safety and wellness. (4) Prioritizing patient safety and wellness may sometimes be at odds with the goals of state and federal anti-trust [sic] laws, which include prioritizing competition and efficiency.”
The bill does not address the need for a state ordered review, judicial or otherwise, of the licensing practices of the boards, as was decided by the Supreme Court.
Hale said that the ADPH is not subject to such a review because the board does not actively regulate the practice of medicine. “We regulate healthcare facilities,” he said. “More broadly, we regulate emergency medical services. We regulate septic tanks. We regulate a wide range of things and that’s where we distinguished ourselves from those boards like the dentists and pharmacists and physicians that are really impacted by that ruling,” Hale said.
However, if the ADPH does pass a regulation as administrative law, that will go before the legislature for a joint-committee review process where they have 45 days to review, revise or deny the proposal. “There already is some oversight in that regard,” Hale said. “[The ADPH] doesn’t regulate the practice of medicine which would be a problem if we were looking at the North Carolina Dental Board case. Since we don’t regulate physicians practices and say who and what constitutes the practice of medicine — that’s the board of medical examiners and medical licensure commission — we largely feel like we’re taken out.”
Hale referred to the department’s most recent annual report to help define ADPH’s regulatory responsibilities. That report begins with statistics that outline some of the dangers associated with giving birth in Alabama.
“Alabama’s infant mortality rate has remained stable for the past few years, with rates of 8.7, 8.6, and 8.9 in 2014, 2013 and 2012 respectively,” the report reads. “In order to improve the morbidity and mortality of Alabama’s infants, strategies must be enhanced to address modifiable risk factors that contribute to poor birth outcomes… The Department’s perinatal programs work with local, state, and national groups to identify and implement strategies to reduce infant mortality and decrease this disparity, such as promoting adequate prenatal care, reducing tobacco usage during pregnancy, decreasing early elective deliveries, and encouraging safe sleep for infants.”
Alabama midwives want to be licensed
If you ask midwives who live in Alabama but have to practice out of state why these numbers are so staggering, they will tell you it is because of the lack of options available to expectant mothers in Alabama.
“If, by law, the Alabama legislature doesn’t provide women a legal option to have a trained and certified care provider in an out-of-hospital setting, then essentially the state legislature is forcing women to deliver in hospital,” said Jennifer Crook. “There is research that shows hospital acquired infection as one of the leading causes of death in the United States. In Alabama hospitals, a woman’s chance of a cesarean section is greater than one in three.
“A woman’s risk of death from a cesarean section is much higher than for a vaginal delivery. A woman’s risk of acquiring a life-threatening infection after cesarean is much higher,” Crook said. “Hospitals are rapidly becoming a more and more dangerous place to give birth. And our state legislature is, in effect, forcing women to give birth in a more dangerous environment while stripping away women’s rights to make their own informed healthcare decisions.”
Crook believes that MASA’s influence over the medical licensing practices in the state is one of the driving forces behind the “organized opposition” to the licensing of certified professional midwives in Alabama.
“Alabama statute requires the Alabama Department of Public Health to license midwives. When they fail to do so, which they’ve done since 1976, this is MASA — a.k.a. the State Board of Health — protecting the turf of obstetricians by denying women the right to access a safe, more cost-effective health care provider, which is exactly what happened with the North Carolina Board of Dental Examiners case,” Crook said. “This is about nothing more than reducing competition. And all of this wrapped up together is a conflict of interest of astounding magnitude.”
Susan Jenkins, general counsel for The Big Push for Midwives, a national advocacy group, began her career with the FTC. “One of the areas of law I am familiar with is antitrust,” Jenkins said over the phone from Washington D.C., “I’m aware of people in Alabama who have wanted to either file a private antitrust lawsuit [against the state] — which I discouraged — or to file a complaint with the FTC, which I encouraged, regarding the role that the MASA play within the state board of public health.”
Jenkins believes that the passage of SB 104 as a response to the North Carolina Board of Dental Examiners v. FTC case is indicative of a larger issue: governmental agencies dictating a woman’s right to choose what’s best for her health.
“That’s not what government is supposed to be about,” Jenkins said. “Government is supposed to be about doing the best for citizens and antitrust laws are in place to guarantee goods and services of the highest quality are provided to people at the most reasonable cost. They are preventing competition and they shouldn’t be able to hide behind state government.”
McClendon doesn’t see his sponsored piece of legislation as something that will impede a competitive medical marketplace within the state. “I can understand the midwives taking that position,” he said. “I think the prohibition against midwives in Alabama is far more interesting than the reaction to the North Carolina case — simply that that prohibition is in place and that we have one of the highest infant mortality rates and there are a number of counties that are very poorly served by the conventional system of healthcare delivery and we’re losing hospitals in our rural areas. I’ve frankly been supportive of the midwives efforts, but frankly they’ve met a brick wall in Montgomery.”
Several advocates for midwives have indicated that a potential FTC complaint against the ADPH and the Alabama Board of Medical Examiners and Medical Licensure Commission could be forthcoming.
When contacted about this situation and how it pertains to the recent Supreme Court ruling, Betsy Lordan, senior public affairs specialist with the FTC, offered this written statement that does not address MASA’s influence on state boards. “Among the key provisions in U.S. antitrust law is one designed to prevent anticompetitive mergers or acquisitions,” Lordan wrote. “Under the Hart-Scott-Rodino Act, the FTC and the Department of Justice review most of the proposed transactions that affect commerce in the United States and are over a certain size, and either agency can take legal action to block deals that it believes would ‘substantially lessen competition.’”
Hugh Evans III, general counsel for the Alabama Ethics Commission offered a similarly vague response when asked about antitrust laws in Alabama and how they pertain to state agencies controlled by market participants. “The Alabama Department of Public Health and the Committee of Public Health are statutorily created entities and these arrangements that you reference are found in Title 22, Chapter 2,” he said. “Its members, therefore, would be public officials subject to the Ethics Law. The arrangement could present conflicts and as they serve the members would have to look out for these. We cannot say at this point that there is an inherent conflict in the relationship; but, of course, facts we don’t have could exist which would make it so.”
The doctors in charge
It’s not by accident that MASA’s board of censors wield as much power as they do with state agencies. According to Section 22-2-4 of the ADPH’s bylaws, “There is hereby created a State Committee of Public Health which shall be composed of 12 members of the board of censors of the Medical Association of the State of Alabama and the chairman of the four councils which are created in Sec-on 22-2-9. The medical doctor members of the committee shall be selected by the State Board of Health, one from each of the United States congressional districts and the remainder from the state at large.”
Hale said that he does not see how having MASA members control a majority of the ADPH’s board could be a conflict of interest. “I have a disconnect with that,” he said. “At the end of the day and something was to come to our attention, I think we would certainly consider it. At the end of the day, if we thought they were right, we would at least consider making ourselves open to submitting to that new bill that was passed and having our stuff looked at by the legislature.”