Many physicians have left private practices to work at hospitals, and there are several reasons for this migration. The Affordable Care Act (ACA) changed the landscape for healthcare, and certain doctors feel that the regulations can be a burden. David Chan, MD from UCLA, Stanford Oncology Fellowship, states that the only way to be compliant with all the regulations is to be in a healthcare system large enough to afford healthcare attorneys and consultants to decipher the ACA. He goes further to say that patients receive less personalized care in hospital environments.
However, others disagree. The switch from private practice to hospitals continue because it offers many advantages for physicians. In addition to protection from the hospital’s legal team, doctors benefit from larger patient bases, onsite resources, less overhead, state-of-the-art equipment, and a larger staff. Doctors that are considering this option should familiarize themselves with non-compete agreements that could be part of their arrangement.
The Purpose of Non-Compete Agreements
When a physician or healthcare worker signs a noncompete agreement as part of their employment contract with a hospital, they could be limiting future career prospects, should they decide to seek employment elsewhere in the future. Noncompetes specify that the signer not see patients within a certain period and geographic range after they terminate employment.
Health systems and hospitals use these agreements because they invest time and money in their employees and want to protect their investments. For example, if a top specialist that is employed by the hospital quits and goes to work for a competitor, their patients are likely to follow that specialist.
Lawsuit Alleges that Non-Compete Agreements are Restrictive Covenants
In May 2017, a group of North Carolina doctors sued a large health care company. They sought to be released from restrictive work covenants and wanted the right to form their own practice. The complaint contended that the company used non-compete agreements that forced doctors to refer patients to the company for further treatment. A company spokesperson felt that the group was smaller when they became hospital employees, and the company helped them grow by investing resources in them.
The agreement was eventually nullified, although non-compete agreements are enforceable in most states. Certain states do not allow them in industries like law and medicine. According to the American Medical Association’s Code of Medical Ethics, restrictive covenants should be avoided by physicians. They reason that non-compete agreements can disrupt continuity of care, limit patient access to care, and discourage competition, which is good for healthcare quality.
Philadelphia Physician Lawyers at Sidney L. Gold & Associates, P.C. Protect Health Care Providers from Restrictive Covenants
Doctors and healthcare workers faced with noncompete agreements can turn to the highly experienced Philadelphia physician lawyers at Sidney L. Gold & Associates, P.C. for guidance. To learn how we can help you navigate restrictive covenants like noncompete agreements, call us today at 215-569-1999 or contact us online. We are in Philadelphia, and we proudly serve clients from the surrounding areas, including Bucks County, Chester County, Delaware County, and Montgomery County.