Great Debates: Implications of the FTC Proposal to Ban the Noncompete Clause

PROGRAM DESCRIPTION: Nearly 90% of physician employment contracts include noncompete agreements, clauses that prevent an individual from leaving for a competitor or starting a competing business within a prescribed geographic region for a defined time after their employment ends. The Federal Trade Commission (FTC) proposed a ban on noncompete clauses in January 2023. If accepted, this will have immediate, far-reaching impacts for healthcare employers of every ilk.
An FTC ban will markedly change the way in which physicians and healthcare employers interact. The FTC states that a non-compete clause “suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.” Furthermore, “unless you’re willing to move hundreds of miles away or take a huge pay cut to restart your career from scratch, a noncompete can effectively lock you into a job.” Banning noncompete clauses will have major implications for health systems that seek to consolidate providers in their markets, a practice that thus far has resulted in higher prices while not improving patient access.
Healthcare employers, from large systems to individual practices, invest significant resources in physician hires, often totaling $100,000 or more per physician recruit. Losing these physicians to local or regional competitors represents a significant loss in return on capital invested for health systems and practices.
What might the implications of this proposed FTC ban be for otolaryngology practices? Will this help or hurt surgeons? How might it change our approach to recruitment and retention? And most critically, how will this impact patients? Many will have little choice in their physicians due to contractual obligations of their insurance carrier to the hospital system. Could this ban result in more fragmented care?
This seminar, led by two seasoned head and neck surgeons and physician executives/MBA, will be a robust and lively discussion of this potentially seismic change in employment law. An experienced surgeon healthcare executive and a private practice otolaryngologist join us to offer their perspectives.

OUTCOME OBJECTIVE 1: Analyze the present and potential future state of non-compete clauses in physician employment agreements.

OUTCOME OBJECTIVE 2: Debate the potential benefits and risks of a ban on non-compete clauses.

OUTCOME OBJECTIVE 3: Explain and advocate for your interests with policy makers.

BACKGROUND STATEMENT: This is an incredibly timely topic for discussion at the AM, having been only announced by the FTC on 1/5/2023. Their period for open comment will unfortunately have closed by the time of the AM, but the topic will remain imminently relevant to all otolaryngologists, trainees, and APPs.