To protect physicians and boost patient access, the House of Delegates took action to ban noncompete contracts for physicians in clinical practice who are employed by for-profit or nonprofit hospitals, hospital systems or staffing company employers.
Unfair noncompete clauses are extensive in health care, affecting between 37% and 45% of physicians. They can be especially problematic for residents, fellows and young physicians by limiting their opportunities for career advancement and restricting their ability to provide care in economically or socially marginalized communities.
Concerns about noncompetes became especially acute when, during the COVID-19 pandemic, physicians advocating for health care worker safety were threatened with termination. Because of noncompete clauses, this could have meant months or years of unemployment or geographic relocation.
Removing noncompete clauses is also seen as a way to improve patient access, enhance the availability of specialist coverage in a community and reduce health inequities by allowing physicians to work for multiple hospitals.
The AMA Code of Medical Ethics says: “Covenants not-to-compete restrict competition, can disrupt continuity of care, and may limit access to care.”
To protect physicians and help improve patient access, delegates adopted policies to:
- Support policies, regulations and legislation that prohibits covenants not-to-compete for all physicians in clinical practice who hold employment contracts with for-profit or non-profit hospital, hospital system, or staffing company employers.
- Oppose the use of restrictive covenants not-to-compete as a contingency of employment for any physician-in-training, regardless of the Accreditation Council for Graduate Medical Education accreditation status of the residency or fellowship training program.
Delegates also directed the AMA to “study and report back on current physician employment contract terms and trends with recommendations to address balancing legitimate business interests of physician employers while also protecting physician employment mobility and advancement, competition and patient access to care.”
The study, the policy says, should include the appropriate regulation or restriction of:
- Covenants not to compete in physician contracts with independent physician groups that include time, scope, and geographic restrictions.
- De facto noncompete restrictions that allow employers to recoup recruiting incentives upon contract termination.
“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,” said AMA Trustee Ilse Levin, DO, MPH & TM.
“We must keep in mind,” Dr. Levin added, “that owners of private practices often invest heavily when hiring and training physicians, and those owners may believe that they need to use reasonable noncompete agreements to compete with large hospital systems or other dominant institutional employers. Preserving and fostering independent physicians and other physician-led organizations is crucial to a healthy nation.”
Read about the other highlights from the 2023 AMA Annual Meeting.