As fewer physicians are forming their own practices, they are finding one potential disadvantage to hospital or physician group employment: non-compete agreements. Physician employment contracts, particularly for specialists, increasingly include non-compete agreements or non-solicitation agreements (sometimes referred to collectively as restrictive covenants). This can lead to expensive, protracted legal disputes when doctors attempt to leave one physician group for another or desire to form their own practices. Further, many patients lose contact with their doctors when they switch practices. In a recent survey of nearly 2,000 primary care doctors in 5 states, 45% of the physicians surveyed had covenants-not-to-compete or other restrictive covenants in their employment agreements.
As large health systems look for ways to remain profitable, many are turning to physician practices to expand specialty offerings and attract new patients (or obviate the need for patients to go to other hospitals or practice groups for different medical needs). From 2015 to 2016, hospitals acquired 5,000 physician practices and employed more than 14,000 physicians, according to a study conducted by the Physician Advocacy Institute. According to the study, between 2012 and 2016, hospital-owned physician practices doubled and there was a 63% increase in hospital-employed doctors. Nothing in recent health care trends indicates an end to this movement. Continue reading ›