There are better ways to retain physicians than to require them to sign noncompete contracts, the CMO of Denver Health says.
The use of noncompete contracts is widespread in healthcare, with as many as 45% of primary care physicians required to sign the agreements, according to the American Medical Association.
The FTC estimates that about 18% of the nation's workforce—roughly 30 million people—are subjected to noncompete clauses. However, in April, the Federal Trade Commission issued a final rule that banned noncompete contracts for most workers, including physicians.
The American Hospital Association and other healthcare stakeholders claim the FTC overstepped its authority to approve what the AHA calls "a bad law, bad policy, and a clear sign of an agency run amok." Now, the FTC final rule is being challenged in court.
Last month, a complaint was filed with the National Labor Relations Board that challenges a noncompete contract with part-time physicians at Mount Sinai Health System. The complaint targets a clause in the noncompete contract that states Mount Sinai part-time physicians may not recruit, solicit, or induce to terminate the employment of hospital system employees or independent contractors one year after a part-time physician's termination.
Mount Sinai declined a request from HealthLeaders to comment on the complaint.
Connie Savor Price, MD, is CMO of Denver Health. Photo courtesy of Denver Health.
"What they are probably trying to do is to prevent part-time physicians from recruiting people they have worked with at Mount Sinai," says Denver Health CMO and HealthLeaders CMO Exchange member, Connie Savor Price, MD. "This restriction bars part-time physicians from offering opportunities to colleagues at another practice or hospital."
According to Savor Price, noncompete contracts for part-time physicians are problematic for those doctors.
"For a part-time physician, noncompete contracts are particularly difficult given that they are only part-time, and the contracts limit a physician's ability to round out their employment, which should not be the purview of the employer," Savor Price says.
Denver Health does not require physicians to sign noncompete contracts.
"We don't feel the need to use noncompete contracts for physicians," Savor Price says. "We want to stay grounded in what we believe is best to service the health needs of our community. We do not see how noncompete contracts contribute to that goal."
Proponents of noncompete contracts for physicians say the agreements are helpful in retaining doctors at a health system, hospital, or physician practice.
The disadvantages of noncompete contracts outweigh the benefits, according to Savor Price, who says noncompete contracts can create a situation where a physician can be forced into working for somebody he or she does not want to work for.
"We know that workers including physicians who are not happy in their work often do not perform as optimally as they could," Savor Price says. "So, it does not serve the community to have these agreements enforced."
Satisfied physicians provide the best care for patients, according to Savor Price.
"We want doctors who want to stay here, who want to practice here, and who are happy to practice here," Savor Price says.
There are better ways to retain physicians than requiring doctors to sign noncompete contracts, according to Savor Price.
"You can provide a pleasant practice environment as well as salaries and benefits that are competitive," Savor Price says. "There are also things that can make a physician's job more interesting and purposeful. For example, many physicians like to teach, so you can provide academic opportunities."
In addition, there are different ways to compensate physicians, according to Savor Price.
"You can provide retention payments or other incentives that do not prevent a physician from going back into a community if they want to leave a job," Savor Price says.
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Christopher Cheney is the CMO editor at HealthLeaders.
KEY TAKEAWAYS
Proponents of noncompete contracts for physicians say the agreements are helpful in retaining doctors at a health system, hospital, or physician practice.
Better approaches to retaining physicians include providing a pleasant practice environment as well as salaries and benefits that are competitive, the CMO of Denver Health says.