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When a physician faces restrictions by a non-compete clause, how does that affect continuity of care? We address that problem in this week’s blog post.
At Gardner Employment Law, we are adept at analyzing physician non-competes to find ways to maintain physicians’ medical practices even when they move. Contact us today for assistance.
Does a Physician’s Non-Compete Impact the Patient’s Continuity of Care?
A good physician wants to maintain continuity of care for patients, even if the physician is moving his or her practice. Traditionally, “continuity of care” means that patients “experience a ‘continuous caring relationship’ with an identified health care professional,” according to the NIH (National Institutes of Health). Continuity of care has always been at the heart of a good medical practice. Studies show that patients who receive continuity have better healthcare outcomes, higher satisfaction rates, and the health care they receive is more cost-effective.
When a physician leaves to start a new practice, many patients prefer to continue seeing their physician. In addition, many patients want to continue with a physician who knows their medical history well. This was the issue in Statesville Medical Group v. Dickey, where Dr. Richard Dickey was the only practicing endocrinologist in the county. His non-compete agreement would have prevented Dr. Dickey from providing endocrinology services in the area, forcing his patients to travel an additional 45 minutes to the nearest clinic.
The court ruled in Dr. Dickey’s favor because the distance between the two locations would impact “the availability of a doctor at all times for an emergency.” In addition, it would fracture existing relationships between Dr. Dickey and his patients. Thus, as a matter of public health policy and to maintain continuity of care, the court held that the non-compete was unenforceable.
Unreasonable Non-Competes Can Affect Public Health
Unlike commercial non-competes, a physician’s non-compete can have a profound effect on individual patients’ healthcare and upon public health as well. If a physician is compelled to leave town by non-compete restrictions, the physician’s existing patients could be required to travel long distances for medical care, as in Dr. Dickey’s situation. Onerous travel requirements can detrimentally impact an entire population’s health outcomes.
One court found this to be the case in Iredell Digestive Disease Clinic v. Petrozza. Enforcing Dr. Petrozza’s non-compete would leave only one gastroenterologist in town. Without another gastroenterologist, Dr. Petrozza’s patients would lose their continuity of care. His complete absence also would create a monopoly for the one remaining gastroenterologist, stripping patients of their freedom to choose which physician to see. Moreover, if they wanted to continue receiving care from Dr. Petrozza, they would have to travel at least 45 minutes.
The court viewed these possibilities to be a danger to public health and denied the request for an injunction, which would have forced Dr. Petrozza to comply with the non-compete. The court ruled, if “honoring his contractual obligation would create a substantial question of potential harm to the public health, then the public interest outweighs the contract interests.” Public health supersedes business interests. As a matter of public policy, the court refused to enforce the covenant.
Physician’s Rights in a Non-Compete Agreement
Physicians enjoy considerably more rights than employees do in a commercial context. Most state legislatures understand the importance of prioritizing patient choice and continuity of care. Statutes protect physicians from overly broad or unreasonably restrictive non-compete agreements.
Like all non-completes, a physician’s non-compete must be “reasonable.” As we discuss in “Can Physicians Break a Non-Compete in Texas,” in Texas a physician’s non-compete agreement must contain the additional following provisions:
- A buyout provision: The physician must be able to buy out the agreement.
- Access to medical records: The physician must be allowed access to patient medical records.
- A list of patients: Physicians must be given access to a list of their patients which they have seen or treated within the year before the physician’s departure.
- Allow for continuity of care: The non-compete agreement cannot prohibit the physician from continuing to treat patients with acute illnesses (even after the physician leaves)
These are statutory rights. If your non-compete is missing just one of these elements, a court may rule that the non-compete is “unenforceable.” While the physician has the option whether to buyout a non-compete, as explained in Physicians’ Right to a Buyout of a Non-Compete, it is up to the courts to determine the reasonableness of the non-compete restrictions overall.
In addition to the rights listed above, courts give special consideration to the time period, geographic scope, or the type of restriction imposed on the practice of medicine. If, for example, the agreement prevents the physician from practicing medicine anywhere within a 100-mile radius of the Texas Medical Center, a court could hold that restriction unenforceable, due to the density of the population near the Texas Medical Center. Or if a specialist in a certain area were prevented from practicing any type of medicine for a period of time, a court could find that this particular non-compete to be “unreasonable.”
In short, if a non-compete is especially harsh on patients’ or the public’s healthcare needs or prevents a physician essentially from practicing medicine at all, courts will not look kindly upon the opposing party attempting to enforce that non-compete.
Safeguard Your Medical Practice from Unenforceable Non-Competes
If you are worried about whether your non-compete agreement could prevent you from practicing medicine if you were to leave your group, know there are legal remedies. Empower yourself and your patients with the knowledge of your rights and options. Give us a call today.