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An Indianapolis hospital has taken the unusual step of eliminating noncompete clauses from its physicians’ contracts, allowing them to join rival health care systems without repercussion.
Eskenazi Medical Group has opted to do away with the clauses, The Indianapolis Star reported Monday. Indiana legislators passed a law this year barring primary care physicians and employers from signing noncompete clauses. Eskenazi’s move goes further, doing away with such clauses for about 50 of the group’s 270 providers, including physicians and advanced practice providers.
Eskenazi CEO Curtis Wright said hospital officials say they don’t want doctors who aren’t good fits and never really felt noncompete clauses were necessary.
Noncompete clauses have become standard language in physician contracts, said Kenneth Dau-Schmidt, the Carr professor of labor and employment law at Indiana University’s Maurer School of Law. But they’ve growing unpopular across multiple industries nationwide, and the Federal Trade Commission is considering banning them.
Dau-Schmidt said Eskenazi’s decision to eliminate noncompete clauses could be a recruiting advantage. The broader implications for Indiana’s health care industry are unclear, though, since Eskenazi is just one hospital.
Brian Tabor, president of the state hospital association, said he doesn’t expect other health systems to follow suit.
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I am a retired practice administrator and have seen the challenges facing doctors who need to seek another employer and “hamstrung by non-competes. Doctors do not routinely change groups or leave hospitals without a good reason. They do not like change; removing this clause is very beneficial.