CHICAGO — The American Medical Association’s House of Delegates voted today to oppose noncompete contracts for physicians in clinical practice who are employed by for-profit or nonprofit hospitals, hospital systems or staffing company employers.

The issue has been debated within the AMA’s large and diverse membership. Physicians who are employers and owners of physician practices may favor the use of reasonable noncompetes, while employed physicians may believe that noncompetes need to be banned outright.  

“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 Board of Trustees member Ilse Levin, DO, MPH&TM, DM.

The use of noncompete agreements has been extensive in the health care system, affecting up to 45 percent of primary care physicians. Trends show more physicians are working directly for a hospital or for a practice that is at least partially owned by a hospital or health system rather than in a private practice.

Recently graduating trainees entering the workforce may be especially vulnerable to the negative effects of noncompete contracts, which can limit their opportunities for career advancement and restrict their ability to provide care in underserved areas.

Although the Accreditation Council for Graduate Medical Education (ACGME) prohibits restrictive covenants as a contingency for residents or fellows participating within any GME training program, there are non-ACGME fellowship programs which require trainees to sign restrictive covenants as a condition for employment.

Covenants not-to-compete are already prohibited outright in several states, including California, North Dakota and Oklahoma. Additional states such as New Hampshire, Delaware, Massachusetts and Rhode Island ban noncompete covenants specifically for physicians.

The Federal Trade Commission recently proposed a ban on noncompete agreements though it would not cover nonprofit hospitals which comprise 57 percent of all hospitals, many of which are large employers.

“We must keep in mind 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,” Dr. Levin said.

The House of Delegates also called for a study of 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. An AMA priority is removing barriers physicians face in providing patient care.

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About the American Medical Association

The American Medical Association is the physicians’ powerful ally in patient care. As the only medical association that convenes 190+ state and specialty medical societies and other critical stakeholders, the AMA represents physicians with a unified voice to all key players in health care.  The AMA leverages its strength by removing the obstacles that interfere with patient care, leading the charge to prevent chronic disease and confront public health crises and, driving the future of medicine to tackle the biggest challenges in health care.