Noncompete clauses have been a divisive issue in healthcare, particularly since the Federal Trade Commission voted to ban the practice earlier this year.
Here are three leaders' thoughts on the state of noncompete clauses in 2024:
Eric Anderson, MD. Interventional Pain Management Physician (Lewisville, Texas): I am on the side against banning noncompetes, especially how the current one is written. My argument as a small business owner is that noncompetes serve companies by protecting our confidential internal information and encourages us to invest in our workforce, knowing our employees won’t just pack up and leave.
Marsha Haley, MD. Clinical Assistant Professor of Radiation Oncology at the University of Pittsburgh. Noncompetes were more important when physician private practices were the norm. The purpose was to prevent a physician from opening another nearby practice to directly compete with the original practice. Now that most physicians are employed by large health systems, we need to rethink the concept of noncompetes. Many large health systems have a footprint that expands several states. If a physician is let go or leaves the practice, this requires the physician to move a long distance to meet the noncompete clause. Given the size and vertical integration of health systems, they are in no danger of losing a significant number of patients to the departing physician. The physician, however, is now required to move a great distance away from children's schools and extended family to make a living.
To make noncompetes more fair and applicable to the current medical environment, they could potentially be tailored to smaller private practices but not be applicable to large health systems or private equity companies.
Thomas Pliura, MD. Physician and Attorney in Le Roy, Ill. Virtually all of those doctors are coerced into signing binding noncompete provisions that prohibit these physicians from leaving the employment status to go back to the private practice of medicine. These physicians are led to believe the grass is greener on the other side of the fence, but when they go into an employed setting, that is not always true. But they are handcuffed by these restrictive noncompetes. I hold the opinion that one of the worst things for the public is noncompete clauses. The FTC is looking closely at this subject, and maybe they will pass federal legislation to prevent the use of noncompete provisions in healthcare. They create artificial shortages in medicine. They create monopolies in medicine. They are not in the best interest of patients or the public.