SCAI: Noncompete contracts unfairly bind cardiologists to hospitals unless they move
The Society for Cardiovascular Angiography and Interventions (SCAI) recently sent a response to the U.S. Federal Trade Commission (FTC) request for information on how noncompete employment contracts impact business. The society said it fully supports banning noncompetes because they are used unfairly by hospitals and health systems to keep interventional cardiologists bound to them.
SCAI said these contracts effectively restrict physicians from finding gainful employment in the same state or region in which they are licensed, as large health systems often span vast regions. These contracts often require cardiologists to move far away from the area in order to find a new position.
"These provisions are contained in what amounts, in many cases, to contracts of adhesion, because a physician’s only choice is to accept the terms of the contract without revision or else forgo employment," SCAI wrote.
The society said in addition to “take it or leave it” types of geographic restriction employment contracts, the arrangements often contain stipulations that mandate a period a physician is not allowed to work for a competing health system. This might range from six months to two years after separation. These contracts may also compel cardiologists to move long distances to take new jobs.
What's more, when a physician leaves for another job outside the area, his or her patients need to find a new cardiologist unfamiliar with the patients' particulars.
"Patients rightfully feel their doctor are their advocates who will prioritize and be with them as long as possible. They choose us and deserve to have that choice respected," SCAI President Srihari S. Naidu, MD, professor of medicine at New York Medical College, explained to Cardiovascular Business. "Noncompetes pretend that this relationship that is deeply personal to us is corporate instead and a business decision. That is simply not where we should be for one of the oldest most noble professions. And as an interventional cardiologist, when we physically treat our patients through their complex heart condition, it builds a relationship that is beyond business. No entity should come between that."
The U.S. hospital system is broken
SCAI wrote in its letter that there is ample evidence U.S. hospital sector's employment system is broken. Hospital mergers in the U.S. over the past 30 years have pruned the market. The society said more than 80% of hospital markets in the U.S. are “highly concentrated,” based on criteria set out in the Department of Justice/FTC horizontal merger guidelines. Hospitals and health systems are also increasingly buying physician practices, which SCAI said "is a concerning trend with the potential to further shield hospitals from competition."
The letter further states nearly 70% of U.S. physicians are now employed by a hospital or a corporate entity, and medical societies have concerns that hospital credentialing policies are being used to promote corporate economic interests and to stifle competition, rather than promoting professional standards and quality care as intended.
"In 2010, approximately 80 to 85 percent of our members practiced medicine in an office-based or group practice. Now, more than a decade later, over 85 percent of SCAI members are employed by hospitals and health systems," SCAI wrote to the FTC.
FTC research shows 45% of all physicians are under some type of noncompete clause, and about one in five of all American workers are bound by a clause restricting them from pursuing better employment opportunities.
There is no legal basis for to retain physician noncompetesSome comments to the FTC have outlined the need to maintain physician noncompete contracts as a way to make sure hospitals can maintain staffing to offer proper public health services.
"There is certainly no legal basis for this claim, and the idea that non-compete clauses somehow benefit physicians or patients is defied by the facts," SCAI wrote. "Noncompete clauses restrict physician job mobility and incomes."
The argument has also been be made that non-competes are needed to recoup costs from training physicians, if hospitals pay for additional education of licensing. SCAI agrees that an economic argument could be made in cases where an employer is seeking recoupment for reasonable resources expended in their time and training of an employee. But if the FTC contemplates any exceptions in the future, SCAI said it wants to be very clear the exception should be reasonable, limited and not limited only to physicians and nurses.
The society outlined evidence showing noncompete agreements prevent physicians from practicing medicine in their communities when they want to, or have to, change jobs. This limits patients’ access to their physicians and ultimately impacts public health as a whole, SCAI argues. The group cited a recent survey-based study gauging the impact of noncompete clauses on surgeons in Louisiana. Physician respondents tended to strongly agree these clauses negatively impacted patients. They said the arrangements force patients to drive long distances to maintain continuity of care (64.4%) while also forcing surgeons to abandon their patients if they seek new employment (76.7%).
SCAI also cited case law where courts have not enforced physician noncompetes because it would have forced a medical specialist out of a community. This effect either left the community without any other choices for care or limited patient choices to one remaining doctor.
Dave Fornell has covered healthcare for more than 17 years, with a focus in cardiology and radiology. Fornell is a 5-time winner of a Jesse H. Neal Award, the most prestigious editorial honors in the field of specialized journalism. The wins included best technical content, best use of social media and best COVID-19 coverage. Fornell was also a three-time Neal finalist for best range of work by a single author. He produces more than 100 editorial videos each year, most of them interviews with key opinion leaders in medicine. He also writes technical articles, covers key trends, conducts video hospital site visits, and is very involved with social media. E-mail: [email protected]