Not everyone in healthcare is excited about the Federal Trade Commission’s (FTC) decision to ban noncompete agreements. In a statement sent to HealthExec, the American Medical Group Association (AMGA)—a trade organization and political lobby that represents health systems and multispecialty provider practices—said they “strenuously” object to the move, adding that it will have “far-reaching negative implications for patients, clinicians and AMGA members.”
“This rule will increase costs and limit investments in innovations and new technology,” Jerry Penso, MD, president and CEO of AMGA said in the prepared remarks. “Such a new business environment will limit the ability of AMGA members to address a number of important needs, such as social drivers of health.”
AMGA claimed the FTC ignored downsides of the rule, calling out how “unilaterally eliminating existing noncompete agreements” and banning future ones will impact labor markers on a local level. The group also rejected the FTC’s assertion that a ban on noncompetes will result in reduced healthcare costs for Americans.
“Multispecialty medical groups and integrated delivery systems use noncompete agreements to support their ability to offer patients a team-based approach to their care,” AMGA wrote.
The organization largely represents healthcare employers. They claim noncompetes are necessary to plan investments in new technologies to improve care delivery, in addition to keeping their facilities properly staffed. AMGA advocates that “reasonable” noncompete contracts continue to be allowed.
Conflicting views
Other healthcare trade groups support the FTC ban on noncompetes. Last year, the American Medical Association (AMA) condemned the use of noncompete agreements, claiming that between 35% and 45% of physicians are locked into contracts that forbid them from taking their services elsewhere, leading to an increase in the cost of care.
In its order, the FTC said a ban on noncompetes could reduce healthcare costs by $74-194 billion over the next 10 years. The decision may also not apply to all healthcare provider groups, as many charitable nonprofits are not subject to FTC rulings.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.