President Joe Biden's administration has been critical of noncompetes, particularly in healthcare, and some states have taken action to ban them. However, policy changes at the federal level haven't been enacted yet.
Heading into the final year of Mr. Biden's first term, physicians are watching closely to see how the federal government will proceed.
"Everybody is eagerly awaiting some resolution on the issue of noncompetes," Manoj Mehta, MD, medical director at Endoscopy Center of the North Shore in Wilmette, Ill., told Becker's. "While this might take much longer than the FTC has projected, it will fundamentally change the landscape of how medicine operates."
Over the last decade, physicians and surgeons entering practice have flocked to hospital employment because they leave training with too much debt; joining an independent practice is financially challenging. Hospitals have offered high sign-on bonuses for the initial contracts, but then the second and third contracts can be lackluster and noncompete clauses in their contracts make it challenging to exit hospital employment without moving to a new community.
If noncompetes are banned, more physicians and surgeons may choose independent practice in the future.
"We are already seeing physicians leaving the big healthcare systems in efforts to improve work-life balance, quality of life and equity," said Dr. Mehta. "An FTC ruling on this would certainly accelerate these departures."
Indiana restricted physician noncompetes in July, nullifying noncompetes for primary care physicians. South Dakota also considered legislation to expand a ban on noncompetes that was passed in 2021, eliminating them for physicians and advanced practice providers.
But even if the FTC bans noncompetes, that may not be the end of them.
"Just know that the states will be able to contest and regulate this at their own level, so the battle might not be a one and done one."