An Indiana Senate panel voted Wednesday to introduce a bill that would ban non-compete agreements between physicians and their employers.
The bill had strong support from physicians and medical consumer groups, who said non-competition clauses harm physicians and their patients, restrict access to medical care and hamper the free flow of work.
On the other hand, hospitals and business groups opposed the bill, saying non-compete clauses are needed to protect trade secrets and get a return on the money and time it takes to recruit and train doctors.
It is the latest in a series of bills designed to address Indiana’s high health care costs, doctor shortages and patient rights.
Sen. Justin Busch, R-Fort Wayne, the bill’s author, said the measure would ease some of the pressure on Indiana’s health care system. He said 78 of the state’s 92 counties have doctor shortages.
“Ask yourself this question: Given the shortage, can we afford to have doctors stand aside and wait for competition bans, which can sometimes last more than a year?” Busch said.
Non-competition clauses prohibit physicians from practicing in a specific geographic area for a specific period of time after leaving a particular practice or group.
The Indiana State Medical Association, Hoosiers for Affordable Healthcare, the Employers Forum of Indiana and several other groups supported the bill.
dr Pardeep Kumar, an internist from Terre Haute, said non-competition clauses can affect patient care because a doctor wishing to leave a practice or group must either stop practicing for a year or more, or relocate to another community. sometimes out of state.
“Patients will lose their doctors because of non-compete agreements,” said Kumar, president of the Indiana State Medical Association. “This is especially true in communities with very few doctors or those communities near the state border.”
The bill was opposed by the Indiana Hospital Association, the Indiana Chamber of Commerce, the Indiana Rural Health Association and other groups.
Dana Stutzman, a health-care attorney at Hall Render who represents the Indiana Hospital Association, said prohibiting non-compete agreements could destabilize Indiana’s health care system. Hospitals in smaller communities, including critical-access hospitals, often spend money recruiting doctors and could lose doctors to employers who can pay more under a non-competition clause.
Ashton Eller, vice president for health and employment policy at the Indiana Chamber, said non-competition clauses are a common business practice in many industries to protect employers’ investments in recruiting and training physicians and equipping their clinics.
“The Chamber believes that non-competition clauses are an appropriate tool to protect this investment,” he said.
The Health and Provider Services Committee voted 9-3 across party lines to bring SB 7 to the full Senate. Voted in favor by Sens. Ed Charbonneau, R-Valparaiso; Liz Brown, R-Fort Wayne; Eddie Melton, D-Gary; Shelli Yoder, D-Bloomington; Stacey Donato, R-Logansport; Mike Bohacek, R-Michiana Shores; Michael Crider, R-Greenfield; Tyler Johnson, R-Leo Cedarville; together with the author of the bill, Busch.
Voted against Sens. Vaneta Becker, R-Evansville; Sen. Jean Leising, R-Oldenberg; and Sen. Jean Breaux, D-Indianapolis.