IU Health's recent move to cut noncompete clauses from all contracts with practicing primary care providers on Dec. 15 is a decision that the Indianapolis-based health system believes will help not only remove healthcare barriers but improve patient outcomes.
"There is some nuance to deciphering what is primary care, and as we looked at the definition of primary care, we looked at it as those practicing general internal medicine, general pediatrics, family medicine, in the ambulatory, outpatient space," Kevin Gebke, MD, Senior VP of Community Medicine at IU Health, told Becker's.
It also comes on the heels of the Federal Trade Commission's vote to ban noncompete agreements in late April and additional restrictions from Indiana leaders last July regarding physician noncompetes.
Some of the state's restrictions include that noncompetes are no longer enforceable for primary care physicians and that they need to include a buyout option for physicians. New contracts must have a process to negotiate a buyout price, including a mediation process should the parties not be able to agree on a reasonable purchase price.
The restrictions also say that circumstances behind a physician's termination may make a noncompete unenforceable, like if a physician is fired "without cause", the physician terminates their employment "for cause," or if a physician's contract expires and both contractual obligations have been fulfilled by both the employer and physician. "Without cause" and "for cause" are not determined under the restrictions, which can leave room for physician interpretation to dispute if a termination was "for cause."
Dr. Gebke has been a practicing primary care physician at the health system for 24 years.
Along with the move to cut noncompete clauses from practicing primary care provider contracts, Dr. Gebke told Becker's that the health system is in the process of bringing its five medical groups into a new entity, the IU Health Medical Group.
The group will also be provided with new contracts that do not have noncompete clauses.
"At this point, we don't have a plan to eliminate noncompetes in other specialties, but we are going to continue to keep an eye towards the state legislature and see if there are other bills being introduced," Dr. Gebke said.
Calling it a value-based decision, Dr. Gebke said that the plan has universally received positive feedback, and that he does not believe the move will have an impact on patient choice or will implement challenges for primary care providers.
He also does not believe that the decision will have a negative financial impact on the health system.
"We don't anticipate having physicians leave because they have the opportunity to leave," he said. "When we do have departures and people leaving the organization, it is a significant investment to recruit people to come in and replace them, especially when we have a large panel that we're trying to care for. If anything, I think this will improve retention and reduce that cost of recruitment."
When asked if he believes other health systems might move in the direction of cutting noncompetes, Dr. Gebke said he would not be surprised if this continues to be a popular topic, especially as discussions continue about what relationships and commitments look like for physicians and their employing organizations.
"We want to make sure that we can protect the interests that are protectable while still valuing that employee-employer relationship that we have with our physicians."