'No personal, professional or financial sense': 6 spine surgeons on noncompetes

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Noncompete clauses are a hot topic in spine surgery and healthcare at large. Some states have sought legislation to eliminate them altogether. 

Six spine surgeons discuss how noncompetes and a potential ban would affect their practices.

Note: Responses were lightly edited for clarity. 

Question: What would a noncompete ban mean for your practice? What would be the upsides and downsides?

Brian Gantwerker, MD. The Craniospinal Center of Los Angeles: In the state of California, noncompetes are unenforceable. This has led to group fragmentation and heavy competition in the spine marketplace. However, it also is a great motivator to treat members as equals, not employees. California has the fourth largest economy in the world and lots of spine surgeons. Things seem to be going fairly well here as folks keep moving here. Having competition is part of business. And if you don’t want someone to set up shop next to you, treat them well.  

Richard Kube II, MD. Prairie Spine & Pain Institute (Peoria, Ill.): Complete elimination of restrictive covenants would eliminate any chance of expanding my practice. Bringing in new physicians costs a significant amount of money. It takes two to three years to break even on investment in a new physician. If a physician can simply walk across the street at any time without recourse, there is no way to protect an initial investment. Given downstream revenue generation at hospitals and the like, there is incentive to attempt poaching these new physicians from my practice. For a small spine practice, there is a seven-figure investment for a new doc. If that physician left in the first two to three years, there would be a loss of several hundred thousand dollars for the practice, which would have to be absorbed by the owners. In spine surgery that is typically only a few physicians or in the case of my business just myself. There is no prudent way to invest $1 million or more while having no way to secure that investment. I would simply remain solo and abandon any thought of recruiting another physician. This ultimately inflicts severe damage upon any exit strategy I might have as well.  

Frankly, the free market should dictate this situation. If a physician does not like my contract, don't sign. It's really that simple. If you sign, then adhere to the contractual covenant. Government intervention here would have significant unintended consequences just as it always does.

Karl Swann, MD. Spine Surgeon in San Antonio: I worked with 18 surgeons during the course of 23 years in one neurosurgical private group practice — Neurosurgical Associates of San Antonio. It was a rarity, a stable group practice in the traditional — perhaps anachronistic —  sense. We gained much personally and professionally by our association. Although we worked together remarkably well, four surgeons left for various reasons. One returned. Two went solo nearby. One launched a competing group in town. 

There was some transient financial heartburn due to our expenses involved in helping start the new hires. One departure led to an eponymous by-laws clause created to recoup the start-up costs incurred by putative future exits. 

We remained civil and never invoked or enforced any type of non-compete. Why would one want to discourage a discouraged associate from leaving particularly if they like living where they are, have family ties and want to remain nearby? When they leave, treated well, they potentially are still colleagues — friendly competitors.

Noncompetes make no personal, professional or financial sense and many lawyers will tell you that they are largely unenforceable. They belong in the habitat of corporations — not physicians. At the very least, they are expensive and their prosecution can become a destructive distraction. In the final analysis, the departures from our group, despite practicing close by, made no difference to those of us who stayed financially or otherwise.

Timur Urakov, MD. University of Miami (Fla.): Noncompete bans in the setting of spine surgery practice have a multitude of implications. For the employers it would mean reduced security and increased costs in hiring surgeons and ancillary staff. On the other side a noncompete ban would add power to the employees' job negotiations and freedom to relocate to a more desirable practice without having to move their homes. The market forces in such a situation will have the potential to drive smaller entities out of competition providing breeding grounds for large organizations to flourish. More and more providers will become employed by these large groups simply for the lack of other options. The seemingly added power from non compete ban will likely diminish again. Nonetheless, being an employee myself, I would support and welcome the non compete ban. A choice to work for an organization should not be based on fears of leaving it.

Christian Zimmerman, MD. St. Alphonsus Medical Group and SAHS Neuroscience Institute (Boise, Idaho): Noncompete actions are rarely enforced because the state of Idaho is a right to work state. That being said, there is precedence for imposed restrictions on some physicians and they are usually geographic in definition. Because of the considerable distance between municipalities (rural) and having to move to another city or local, usually disallows one from commuting and formal transfer will ensue. The disadvantages and inconveniences are self-realizing unless newer aspects of employment are desired. They are becoming less utilized in contract negotiations of late.

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