131. Noncompete agreements are huring healthcare in rural Ohio
Health care systems can tie up their physicians for years though noncompete agreements which preclude them from moving to a competitor. For rural health care systems where there are not enough physicians to begin with, this is a big recruiting problem.
Our guest today is Paul Westbrook, Vice President and General Legal Counsel for Memorial Health System.
Paul explains that physicians who sign noncompete agreements and want to relocate—for whatever reason—are stuck. A noncompete agreement will generally preclude them from working for another system for a year or two and within a certain radius of their current employer. So, it’s either stay put, stop practicing medicine or hire an attorney and challenge the noncompete agreement in court.
In Paul’s view, there’s no justification for any of this. Trade secrets or intellectual property are seldom at risk, even though health care systems might argue otherwise. The reality is, health care systems—most of which are non-profits—want to control their physicians.
Memorial Health System is unique in Ohio for not utilizing noncompete agreements. Years back, Paul reviewed the physician employment contracts MHS used and questioned whether the noncompete provisions should be retained. Paul was concerned about the fact that rural healthcare systems like MHS struggle to retain primary care physicians and that noncompete agreements disproportionately impact these systems0.
MHS’s CEO at the time agreed. MHS stopped using noncompete agreements and focused, instead, on treating its physicians as true partners and with professional courtesy. The result: MHS physicians rarely leave for competitors.
But physicians seeking employment with MHS are often unable because of noncompete agreements, and so MHS has challenged those agreements in court. One of those lawsuits involves OhioHealth.
Perhaps the legislature will take note. Other states have already prohibited noncompete agreements. MHS just might help change the legal landscape for physicians.
Listen to the conversation.
