Forcing doctors to sign non-compete clauses harms the health of Minnesotans

May 10, 2023 2:11 pm

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Doctors used to set up an independent practice or join a small group clinic. 

That’s changed

With the modernization of health care, the growing complexities of the private insurance market, and costs of electronic health records and malpractice insurance, physicians find it increasingly difficult to operate independently, especially in primary care fields. Instead, a growing number of doctors are employees of large health care organizations. In recent years, Minnesota has experienced frequent consolidation of these organizations which means more doctors now work for fewer employers statewide. 

Nationally, doctors are about three times as likely as other American workers to have a non-compete clause in their contract. A non-compete clause means when you leave an employer, you can’t go work for another organization that could be considered a competitor. If you do, the former employer could sue you. In 2018 that figure was estimated to be 45% of all physicians. We don’t have the specific numbers for Minnesota, but with the growing industry consolidation, it is going up. 

Health care non-competes mean that if a doctor wants to separate from their employer, they face a difficult choice. They could find a new job outside of the radius specified in their contract, often ranging 50-100 miles. This would mean abandoning their patients and uprooting their family to a new region of the state. 

Alternatively, they could decide to put family stability first, spending the next one to two years without seeing patients. Or as commonly happens, they could decide to stay in a job they don’t like, hoping for an early retirement.

This harms the health of Minnesotans.

First, it makes it much less appealing for doctors to come to Minnesota or stay in Minnesota. Many states have already banned the use of non-compete clauses. We have severe and worsening physician shortages in rural Minnesota. According to MDH, 1 in 3 rural Minnesota doctors plans to stop practicing medicine within the next five years. We should make it appealing for doctors to come to live and work here, and non-compete clauses do the opposite.

Second, these clauses actively push physicians out of town. For example, a colleague of mine was working as a psychiatrist in a rural Minnesota city with high need and few options for specialty care. She decided to leave her employer due to professional concerns, but because of her non-compete is now not legally able to care for the patients in her own community, leaving them without access to a much-needed specialist, even though she still lives there.

The third and perhaps most important reason that non-competes harm health is by disrupting patient care. When a healthcare company uses a non-complete clause, it takes away our ability as patients to continue receiving care from the doctor of our choice, the doctor who knows us best. This artificial disruption in the doctor/patient relationship can cause real harm and is why the American Medical Association considers non-competes unethical. 

It is true that recruiting doctors or any employee takes time, money and energy, but employers can use delayed incentives to improve retention and non-disclosure agreements to prevent the disclosure of trade secrets. 

It is time to stop pretending that non-compete clauses serve any purpose besides limiting competition and restricting Minnesota workers from finding better pay and more fulfillment at a different organization. 

And, in the case of physicians, harming the health of Minnesotans.

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Hannah Lichtsinn
Hannah Lichtsinn

Dr. Hannah Lichtsinn is a primary care internist and pediatrician in Minneapolis and an assistant professor of medicine at the University of Minnesota.