“The limits of tyrants are prescribed by the endurance of those whom they oppress.”
— Frederick Douglass

For doctors beginning their postgraduate professional lives, there are several options. One is the proverbial “hanging up the shingle,” a folk saying meaning going out on one’s own. The advantage is that this doctor is his/her own boss, can run the practice any way desired, and reap all the profits; the downside is such a doctor also suffers all the liabilities—overhead, regulatory costs, etc. Noteworthy in the liability column is reputation. A doctor on his or her own, if subjected to criticism—valid or not—can take a huge, sometimes career-ending hit.

The next arrangement to consider is joining a group or being part of a partnership. This still allows for personal preferences in how to practice, but one must adhere to established protocols. Also, being new to the group will mean being a “junior” member, with the perks available only after some amount of time equity is earned. The advantages, however, include backup from other physicians and some protection from criticism in today’s social media-driven review landscape.

Academia, i.e., working for a teaching institution, means teaching must be enjoyable for you. This offers the most anonymity, especially with the sovereign immunity these entities offer, but pays the least.

With all these difficult choices to make, most would take the easy way out: being hired by a hospital. Hospitals seem to have it made; they have competed with the large physician groups in town by making groups of their own—either buying practices or recruiting new physicians to join. It’s a strategy that ties in with the exclusivity mentality of insurance panels (which doctors may or may not be allowed to join). The larger the hospital, the more patients are available, and the more insurance panels are ripe for attracting patients. What’s not to like? The downside is that when you are employed by a hospital, you have joined the big machine; whether or not you have been philosophically opposed to this structure, you’re now part of it. Would you like some salt on that crow?

A Faustian bargain

Doctors in the last two generations have been happily (and haplessly) going about their practicing medicine business, completely unaware of the insidious accounting machinations that were conspiring against them. It was simple: if doctors are paid less, payers make more; if procedures are relegated to “services,” less can be charged, and payers make more. Thus, for doctors living through this sea change in medicine, overhead has gone up, but reimbursements have been going down: do the math.

Add to this the new reality of the cost of education. Educational loans have garnered little sympathy. They can’t even be dismissed via that final surrender to the economy—bankruptcy.

Hospitals offer respite from current economic, regulatory, and competitive pressures and instant income. Overhead? What overhead? If the $4,000 ultrasound head breaks, it’s not your problem. If your nurse calls in sick, she is replaced on the fly, and business goes on.

The real problem comes not from disliking the administration, fighting with Utilization Review, or even taking orders from accountants, but from getting out of something when a problem becomes intolerable. Can you?

Here comes the caveat

Imagine a business whose trade is not in practicing medicine but in wheelin’ and dealin’ in medicine “providers.” Such providers come and go. Imagine a business that can say not only how they come but how they go. Enter the restrictive covenant. This is a failsafe measure implemented on the front end of the employer-employee relationship, i.e., the contract, that says:
You can work for us, and when you don’t want to work for us anymore, you:

• can’t take your patients with you,
• can’t practice anywhere nearby (in our competitive landscape),
• can’t talk about the way we do things, and
• it’ll be like that for an amount of time which we determine is necessary to protect our business interests.

This makes it a love-it-or-leave-it job, but if you leave it, you just may hate it. Do you have a family? Are the kids in school? Sorry, you need to move, because your contract says you must. You don’t want to start over without any patients? Sorry, you cannot let any of your patient base know how to follow you. Would you like the records of the patients who do find you? Sorry, you’ll have to ask for them like anyone else.

Unfortunately, it goes further when you consider the public interest or patient well-being. The continuity of care, almost as sacred as the patient-physician relationship, is a casualty. While it’s not impossible for another doctor to take up where you left off, it’s difficult. And it can happen like that because there is no longer a patient-physician relationship—that’s irrelevant in today’s “provider” mindset.

Another casualty is competition. Does an 800-pound gorilla hospital really need to keep little ol’ you from competing with it? Will the Mayo Clinic fold from competing with you? Do HCA’s 185 hospitals nationwide need to fear you putting them out of business?

It used to be the marketplace that determined the survival of the fittest. And while this is a sometimes-cruel aspect of capitalism, at least it’s fair:
Let me go; let me practice medicine. Don’t be afraid of me unless I do it so much better you lose patients, and—if so—it’s really your problem to solve, not mine.

Can they? Why, yes, they can.

Hospitals can do these things, tightly entwined in the “restrictive covenants” section of your contract. Can they really? Yes. However, the enforceability of these non-compete clauses is according to state interpretations. Your state will want to know if the terms are reasonable, i.e., are they greater than what’s required to protect their legitimate business interests? Will they impose undue hardship on you? Will they hurt the public?

Legitimate business interests get vaguer the larger the hospital. Uprooting your whole family is probably an undue hardship. And the obliteration of continuity of care and fair competition indeed hurt the public.

What you should know about restrictive covenants

You only need to know one thing before signing an employee contract containing restrictive covenants:

How conservatively or liberally will your state interpret the answers to the above questions?

That’s it. There is no other golden advice to share on how to beat the restrictive covenant. (Groveling at the CEO’s feet may occasionally work, but that’s it.)

Even if your lawyer can beat up their lawyer, know that it may be a pyrrhic victory because you’re going to spend a lot of money. You’re going to spend so much money that there’s another aspect of restrictive covenants that is never mentioned: while they may not constitute slavery, restrictive covenants aren’t unlike the debt bondage of indentured servitude, which was outlawed by the 13th Amendment.

In the words of Benjamin Franklin: “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”

Shakeel Ahmed is a gastroenterologist.