Dec 16, 2024

LETTER: Noncompete clauses, lessons not learned from the past

Posted Dec 16, 2024 6:00 PM

Exactly 32 years ago this month, I decided I couldn’t work with my existing employer. Although we knew no one in Hays, we moved to Hays from South Florida.

My wife was immediately happy. She became involved in the community and became active in our church. For the first time in 10 years, she was relieved not to have to live with an absent husband, struggling with two residences and medical school.

Our kids (2, 4, and 6) had transitioned beautifully, immediately finding new friends. At that time, there were no hospital-employed physicians, and the hospital had just transitioned to its new campus, Hays Medical Center. It was a great asset and attracted me to the community in the first place. We loved this community and wanted to stay and start our own independent practice.

We had one problem. It’s called a restrictive covenant. This covenant could have prevented me from staying in this area and practicing dermatology. We decided to fight to stay in Hays.

At that time, the director of medical recruitment of Hays Medical Center testified that we needed at least three dermatologists to service the needs of Hays and the surrounding community.

Our fight eventually ended up at the Supreme Court. We lost. It cost me a lot of money, but I was able to stay in Hays. I believed then, and I believe even more strongly now, that restricting physicians by way of a restrictive covenant is against public welfare.

Fast-forward 30 years. I just read with interest the post from Mr. Herrman regarding the hospital's current status. I agree that the turnover of staff is always a problem at any hospital or physician's office. He acknowledged the difficulty in recruiting physicians to Western Kansas.

Unfortunately, HMC, over the last year, has lost or will lose many physicians. These physicians will be forced to move away from Western Kansas due to restrictive covenants if they want to continue practicing medicine.

Some of these doctors would have chosen to stay in Western Kansas if given the opportunity.

At the same time, HMC is attempting to rebuild these departments. It has filed a lawsuit trying to prevent Dr. Grove from practicing in Tribune, Kansas (165 miles away). If HMC was really interested in providing general surgical care in Greeley County, why restrict his access?

Another lawsuit has been filed by Dr Rodriguez against HMC. He also wants to provide oncology care in Western Kansas. How can HMC operate a cancer center if there is only one remaining oncologist?

Unfortunately, restrictive convents are indeed a common practice amongst physician groups and hospitals.

The covenants at HMC include multiple different physician specialties as well as other staff members, all controlled by one nonprofit corporation. The intent is to reduce competition, but unfortunately, at the same time, they restrict access to health care throughout most of Northwest Kansas if a physician chooses or is forced to leave.

Mr. Herrman sent out an email a couple of weeks ago to all HMC associates stating “noncompete covenants are “standard in health care,” “required” in its contracts, and “provides assurance to our patients that the hospital and its clinics have the medical staff and expertise to provide for their oftentimes complex medical needs.”

Noncompete covenants are standard in the health care industry. However, what he fails to state is that not all contracts are as broad as the ones HMC chooses to enforce on its previously employed physicians. More importantly, HMC is not required to enforce them.

Does the last statement imply that previously employed physicians do not have the “expertise to provide for their oftentimes complex medical needs”? So, in other words, he’s doing western Kansas a favor by denying those physicians from practicing medicine in this region?

The intent of all restrictive covenants is to preserve a financial asset. We doctors do not consider patients financial assets. We develop very deeply personal relationships with our patients.

My questions are:

No. 1: Why insist on enforcing a restrictive covenant?

If contract negotiations fail, for whatever reason, should that tenured physician be restricted from practicing medicine in the entire region?

After all, we are in a doctor-shortage area. Doctor recruitment to Western Kansas is, unfortunately, nearly impossible. I am not aware of any full-time physicians taking the place of these lost physicians. I have heard about the use of locum tenens for replacement.

In the last 30 years, exactly, 1.5 full-time dermatologists have entered our area. Dr. Schaeffer, who grew up in Salina, and Dr. Hibbs, my daughter. You see, trying to recruit to Western Kansas is very difficult.

No. 2: Why have the local community leaders, elected representatives of our district, our state, elected representatives to our U.S. House of Representatives and Senate and our governor been completely silent about their opinion on the enforcement of this draconian policy?

Enforcement of a policy that prevents respected and established physicians who are living and contributing to their community to leave or stop practicing medicine should be reevaluated. It is certainly against public welfare at a time when access to health care is extremely difficult, especially in underserved areas.

Does anybody believe a doctor previously employed at HMC should be restricted access to all patient care in western Kansas?

No. 3: Does anyone think locum tenens can replace seasoned experience physicians? Filling the empty positions with a locum tenens, who by definition are temporary doctors, is not the answer. They are also much more expensive than permanent physicians.

I sure wish I had a solution to this problem, as I have raised my family and hope to see my grandkids grow up here in Hays. Over the last 30 years, I have developed very strong bonds with many of the physicians that have been forced to leave this area. We certainly need a strong hospital.

I will continue to do everything in my power to support HMC. It is my prayer that HMC can rebuild the physicians and staff they have lost.

However, enforcement of restrictive covenants, which prevent our local trusted physicians from practicing their skills here in Western Kansas, makes absolutely no sense to me.

Nearly all these departing physicians require a hospital to continue practicing their skills. Why would they negotiate themselves into such a dead-end position?

—Don Tillman D.O.,
Great Plains Dermatology