Noncompete agreements have become a highly consequential and contested element of physician contracting as systems grow bigger and physician shortages persist across the U.S.
South Carolina is one of several states considering a ban on noncompete agreements, with legislators expected to take a final vote in the coming weeks.
The bill, introduced in December, unanimously passed out of a panel of state House lawmakers Jan. 20. It would ban any restrictions on where a physician can practice after their termination. The bill also specifically outlines that the physician must also be allowed to continue their relationship with a patient per the patient’s request.
“Noncompetes and the way that they’re used serve as a blanket restrictive covenant for physicians when they sign a contract is really problematic,” Marcelo Hochman, MD, an independent physician and former president of the Independent Doctors of South Carolina, told Becker’s. “It abridges the patient’s rights to follow their doctor if their doctor is going to leave the hospital system and now they have to move X miles away. That patient may not have that option, [especially] senior patients, or maybe even just geographically … 30 minutes, 45 minutes away may just not be feasible, or you may just not want to do that.”
This has a twofold effect of disrupting a patient’s ability to stay with their physician while also impeding physicians from providing a continuity of care, Dr. Hochman said.
“If I’m forced to leave, that patient just gets assigned to somebody else—it’s not even a choice on their part,” he said. “And I don’t have the opportunity to continue the care that I’ve established in X number of years of that relationship.”
Furthermore, noncompetes position physicians’ knowledge and skill as intellectual property or trade secrets, rather than knowledge and skill established through years of training at entities that may or may not have any connection to their current place of employment.
“Our skill set is in our head, right? I mean, it’s not like we’re taking with us something that belongs to somebody else,” Dr. Hochman said. “Being able to freely exercise your profession is, I think, a pretty basic thing that I think all of us would want.”
He also pointed to a double standard that exists between physician contracting and that of other professionals, such as lawyers, when it comes to noncompete agreements.
“The legal profession has a clause in their moral code of ethics that prohibits attorneys from signing blanket noncompete clauses because the attorney-client privilege is supposed to be so special,” Dr. Hochman said. “What about the doctor-patient relationship?”
While some state bills have imposed restrictions on the geographic range a noncompete may cover or its time limit, Dr. Hochman said that these kinds of restrictions “miss the point” of why noncompetes are problematic to begin with.
“You can narrow it down or minimize it down to the detail. ‘Oh, well, it’s just 20 miles’ or ‘it’s just 30 minutes,’ but it really misses the point,” he said. “The bottom line is that the patient’s rights are infringed upon, and the doctor’s rights are infringed upon …. It’s not just a contractual thing.”
Dr. Hochman is optimistic about the bill’s passage and hopeful for what it could mean for both employed and independent physicians in the state.
“The doors would open for physicians to be able to practice where they wanted to,” he said, “Not everybody’s going to leave employment, but it’s also not for everybody, right? There’s pros and cons for an individual, but I think there are a lot of people who would leave employment if they had that option.”
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