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State Senator Pushes Legislation To Limit Healthcare Non-Compete Contracts

By  |  July 9, 2023

State Senator Terry Johnson is pushing legislation that seeks to limit healthcare non-compete contracts between hospitals and healthcare professionals. The proposal comes as doctors accuse Adena Health System of using the contracts to maintain an illegal monopoly over certain orthopedic services.

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    The current legislation, backed by Johnson, would limit non-competes to six months and a radius of 15 miles. It would also only apply to physicians, physician assistants and advanced practice registered nurses of nonprofit hospitals. This bill places an explicit geographic limit on non-compete contracts and restricts post-employment non-competes in particular.

    The Ohio Hospital Association has defended the use of non-competes in the healthcare system, noting that it helps hospitals protect their investments in helping bring physicians and medical professionals to their communities, as summarized by Madison Health CEO Dana Eagle, who stated: “Providing an underserved area with a new general or specialty physician practice, for example, would often not be feasible absent a reasonable non-compete agreement to assure continuity of care and access to those services within a community.”

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    The Ohio State Medical Association has supported Johnson’s previous proposal to eliminate non-competes outright, while the Ohio Hospital Association opposes it, arguing that it helps extend care to rural communities. On the other hand, the American Medical Association has come out in strong opposition to non-compete agreements, noting that they interfere with patients’ access to their doctors.

    Johnson’s previous proposal did not get out of committee, but the current bill is likely to have more success. If passed, it will mean that hospitals will no longer be able to restrict employee movement beyond reasonable limits, resulting in better access to healthcare for patients and fairer conditions for healthcare professionals.