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R EVIEW

Restrictive Covenants in Medicine in the United States

RC S IN M EDICINE : T HE E FFECT ON P ATIENTS Although the focus of RCs is often on the business of medicine, there are direct patient care effects as well. Patient choice and continuity of care are key ele ments of sound practice and service delivery. The inability of a patient to maintain a relationship with their physician violates the concepts outlined in the Patients ’ Bill of Rights originally presented by the American Hospital Association — an organization that actually sup ports RCs (19, 20). Restrictive covenants may force doc tors to exit a community, leaving patients in search of new physicians, disrupting ongoing treatments, and in some cases requiring patients to travel to another city for continuity of care. Typically, when a physician leaves a practice, they are required to send a letter to their patients, suggesting an alternative provider and infor mation on how to obtain their medical records should they choose to leave the practice. The precise details vary, but in states with RCs, the practice does not ex plicitly need to inform the patients where the exiting provider is going, leaving them without continuity in care. However, even in some states with RCs, the departing physician may request a list of patients, plac ing the burden on the doctor to contact each individual patient. Despite the sensitive nature of the patient – phy sician relationship, patient perspectives have not been traditionally incorporated into RC laws. R OLE OF THE FTC IN R EGULATING RC S The FTC, formed in 1914, has long served as the government ’ s key agency to regulate commerce, monitor consumer protections, reduce monopolies, and oversee federal antitrust enforcement. The overtly stated organizational mission of the FTC is to broadly “ protect the public and to protect competition. ” The FTC maintains a bipartisan and theoretically independ ent nature, with a requirement that the makeup of the 5 commissioners not be exclusively from 1 political party. The FTC acts in numerous ways to ful fi ll itsmis sion and acts under a series of bureaus. Speci fi cally, the FTC may act as an investigatory body, initiate for mal complaints and legal cases at the federal level, have its staff serve as prosecutors in such cases, and issue trade regulations. It is in this latter capacity that RC reform has taken shape recently. President Biden issued an executive order in 2021 focused on trade practice (4). Executive Order 14036, ti tled Promoting Competition in the American Economy, outlined the approach to reduce anticompetitive behavior in various professions, including health care. Speci fi cally, it directed the FTC to use its regu latory rule process to reduce the use of noncompete clauses which, as discussed earlier, impair worker mobility. In January 2023, the FTC issued a proposed rule outlining reforms for public comment (3, 4). Of the 26 000 public comments received, 96% were in favor of reforms, with many comments originating from

geographic distance as large as 50 to 100 miles. The latter condition implies that a physician leaving one sys tem may no longer be able to practice in the entire city. Physicians are often subsequently forced to relo cate to different cities, counties, and municipalities as a result of these severe geographic restrictions. Many markets have only a handful of employers and exist as oligopsonies. The concept of a monopsony or oligop sony is the inverse of monopolies and oligopolies. In the former, 1 or a small group of buyers (health care companies) dominate the market, and in the latter, it is the sellers (physicians) who dominate. Corporate ac quisition of practices, growth of for-pro fi t health care companies, and emergence of private equity fi rms in this context have all led to increases in the buyer ’ s power (13). The resulting oligopsonies in health care can set market prices (salaries) and through RC laws control the movement of workers. To maintain control, for-pro fi t or highly competitive not-for-pro fi t systems may be less willing to grant physicians freedom from RCs. In addition, those physicians in academic medi cine may not only face RCs but even less choice of simi lar employers within a given city. It should be noted that the FTC ban may have disparate case-by-case ba sis of applicability and enforceability to for-pro fi t versus nonpro fi t hospital systems — a point of criticism brought by opponents of the ruling (14). Physicians may want to leave a practice due to 1 or more of these typical scenarios: deterioration of work conditions, undue pressure for productivity often in the form of relative work units or similar metrics, lack of support (nursing or administration), and personal or professional con fl icts. The effect of essentially being “ boxedin ” to a particular employer ’ s system results in the effective loss of autonomy as well as reduced lateral (or in some cases upward) mobility. The solutions are often not ideal and include the following: continue to work for a given entity, leave the city, or engage with an attorney for legal resolution. Leaving the city may not be possible due to familial or fi nancial constraints. The enforcement of RCs varies in each locality. However, the potential for legal con fl ict may dissuade potential employers from hiring a phy sician with an active RC on their contract. Continuing to work despite a desire to leave can have negative effects on physician well-being. The result is being a “ captive worker. ” Depending on the driver for the person wanting to leave, they may not have the ability to change their work environment or may be subject to pay discrimination or various forms of harassment from coworkers or administration (15 – 17). Reduction in autonomy and feelings of powerlessness have been well-described drivers for burnout (12). The conse quences of burnout range from leaving medicine to continuing to practice but with impaired perform ance, personal struggles with substance misuse, and relationship turmoil and suicidal thoughts or overt self-harm (18).

72 Annals of Internal Medicine • Vol. 178 No. 1 • January 2025

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