Physicians Grow Louder On Noncompetes

Mon 04 Mar, 2024

                                                               By Ashleigh Hollowell 

Amid a nationwide shortage of physicians, contractual noncompete clauses are making it more challenging for patients to receive the care they need, particularly in more rural regions, and physicians are pushing back.

It is estimated that between 35% and 45% of physicians in the U.S. are bound by noncompete clauses of some kind.

Noncompete clauses can prevent physicians who are trained in a certain specialty from practicing it again within a prescribed distance if they leave a hospital, which is where the detriment to rural care can increase.

This happened to one physician working in Fort Wayne, Ind., who left a position at one hospital to join another.

"There is a shortage of physicians who do the subspecialty work that I do in Fort Wayne," said David Lankford, MD, a pediatric critical care physician at Parkview Health. "I believe many critically ill children and their families would have to travel significant distances at significant hardship to get access to care."

Dr. Lankford is among several physicians who are fighting back against the restrictions noncompete agreements place on physicians.

The practice is one that the Federal Trade Commission has come after for all professions, including medicine, citing that the noncompete clauses reduce wages and harm competition. The agency estimates that prohibiting employers from using noncompete clauses could "increase workers' earnings across industries and job levels by $250 billion to $296 billion per year."

Right now, only three states — California, North Dakota and Oklahoma — forbid the enforcement of noncompetes for all employees.

"Allowing physicians to work for multiple hospitals can enhance the availability of specialist coverage in a community, improving patient access to care and reducing health care disparities," Trustee Ilse Levin, DO, said during a 2023 meeting.

Hospitals, though, have a different view.

"We think they are important for protecting investments that hospitals make to recruit doctors and senior executives," Chad Golder, general counsel for a medical society. "Imagine you're a rural hospital out in the country, and you spend a lot of money to bring on a new physician, to get them integrated into the community, to train them, and they leave after a short period of time after you've made all this investment to get them out there."

While there is no set deadline for the FTC to make a decision on noncompete agreements, experts say it could come in April 2024, according to The National Law Review.

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