With a national ban for noncompetes effectively dead under the current FTC leadership, the battle is playing out state by state, hospital by hospital, and contract by contract.
Marcelo Hochman, MD, a Charleston-based independent physician and former president of the Independent Doctors of South Carolina, has lived on both sides of the employer-employee equation. He has been both a physician who built and runs his own practice, and as someone who has hired, negotiated with, and observed the ways health systems use noncompetes not as a last resort, but as a standard clause buried in a stack of onboarding paperwork.
He joined Becker’s to discuss how eliminating noncompetes would fundamentally reorder the relationship between physicians and the institutions that employ them.
Editor’s note: This interview was edited lightly for clarity and length.
Question: How do you think eliminating noncompetes could change the power dynamic between physicians and health systems?
Dr. Marcelo Hochman: It does a couple of things. First, the patient is subject to an administrative contract they have no part in. When their doctor has to leave the area because of a noncompete, that patient can’t follow their physician. If you live in Charleston and your doctor has to move to Greenville, that may simply not be geographically possible. There’s a real ethical problem there — patients are being denied the ability to follow their physicians. Eliminating noncompetes would restore that balance.
The other pillar is that if hospitals have to compete to keep their doctors happy, that changes the dynamic entirely. The practice or hospital now has to be responsive to physicians’ needs and complaints. Right now, if you lose your job you have to move out of town — the health system doesn’t have to deal with you. Eliminating noncompetes takes away the ability to use geography as a tool to control the workforce. I know that sounds almost harsh, but noncompetes have just been legally enabled to do something they were never designed for. They were designed for high-level executives with access to intellectual property. It doesn’t help anyone but the employer.
I do think noncompetes have a legitimate role in certain specific contexts. When I hired a young associate, I didn’t impose a noncompete, but I did negotiate a restrictive covenant: if you leave in the first year, you owe me X; the second year, a bit less; by the third year, even less, because by then you’ve been contributing to the practice. That’s negotiated, and it’s fair. I also think noncompetes make genuine sense when a physician sells their practice. If I sell to my associate someday — which is my succession plan — it makes sense that I don’t stick around and compete with him. That serves both parties.
But that’s not what hospitals do. Hospitals have everyone sign the same blanket noncompete and pay physicians $1,000 to sign it — so now legally there’s consideration, which makes the contract even harder to challenge. There’s really no good argument for a blanket noncompete. And notably, hospitals never bring up the issue of patients being unable to follow their physician.
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