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Sometimes it just isn’t worth going at it alone.

Consolidation is transforming medicine: Here’s what every doctor needs to know

Sheila P Burke discusses how the Trump administration could impact Medicare and Medicaid

Sheila P Burke Trump administration Medicare and Medicaid 

 will officially become the 47th President of the United States. After a plethora of health care nominations following the 2024 Presidential Election, questions about how this second Trump administration will approach health care 

 have risen. Sheila P. Burke discusses what changes could be ahead for 

 served for 19 years on Capitol Hill, notably serving as Deputy Chief of Staff and later Chief of Staff to Senate Majority Leader Bob Dole, where she was involved in legislation related to Medicare, Medicaid and the Maternal and Child Health programs, among others. She was elected Secretary of the Senate in 1995, and served as a member of the Medicare Payment Advisory Commission (MedPAC) from 2000-2007.

Sheila P. Burke, chair, Government Relations and Public Policy Group, Baker Donelson Law Firm, explains what changes could be made to Medicare and Medicaid under the Trump administration.

Topics

Medicare and Medicaid under the Trump administration

Sheila P. Burke talks about how the Trump administration could work together with Congress on health care legislation

Sheila P. Burke Trump administration working with Congress on health care legislation

 have risen. Sheila P. Burke uses her own professional experience to predict how the Trump administration could work together, or clash, with Congress on health care legislation.

Sheila P. Burke, chair, Government Relations and Public Policy Group, Baker Donelson Law Firm, explains how the Trump administration could work together, or clash, with Congress on health care legislation during their next term.

How might the Trump administration work together with Congress

 banning noncompete agreements is projected to alter the future of the healthcare industry’s economy, assuming it is upheld by the courts.

Noncompete agreements contractually prohibit workers from joining or starting a competing business after leaving their employment. These agreements typically contain terms designating how long and where these restrictions apply.

In the health care sector, 37% to 45% of physicians are affected by 

. Medical businesses, such as hospitals, have traditionally used noncompetes to mitigate the risk of losing valuable, trained staff and preserve care for their patients. However, many physicians find that their noncompete agreements oblige them to choose between enduring poor working conditions and uprooting their lives to continue their practice outside of the area covered by the noncompete.

The new rule bans noncompete agreements by classifying their usage as unfair methods of competition. The 

 that banning noncompete agreements will benefit the economy by promoting competition, leading to approximately 8,500 new businesses created annually and increasing earnings for workers by $524 per year. Additionally, the FTC believes its new rule will cause healthcare costs to drop by $194 billion over the next decade.

Out of the 26,000 comments received by the FTC on its proposed rule prior to issuing the final rule, about 25,000 were largely in favor of a ban. A significant number of the submitted comments came from healthcare employees and medical business entities. Many healthcare employees shared stories about how noncompete agreements had detrimentally affected their lives, practices and patients. Conversely, many hospitals were in the minority against the rule in the submitted comments and shared concerns about potential financial devastation of their businesses due to the new rule’s impact on staffing, training and employee retention.

 in opposition to the ban scrutinized the FTC rule because of the differences in application to nonprofit versus for-profit entities. The FTC is authorized to promulgate rules regulating entities that are organized to “carry on business for its own profit or that of its members.” About 30 years ago, the U.S. Supreme Court 

 that the FTC does not have jurisdiction over nonprofit entities unless they provide substantial economic benefit to their for-profit members. When promulgating the new ban on noncompetes, the FTC said that nonprofit designation or tax-exempt status is not dispositive of whether the entity is profit-making, and many nonprofit healthcare facilities may still be subject to the ban.

Commenters argued that the discrepancies between nonprofit and for-profit facilities will create an unfair playing field amongst competing medical businesses, ruining the economy of the industry. Some commenters claimed that insurance premiums will rise because nonprofit businesses would have greater market power in provider network negotiations. Others worried about frequent costly bidding wars to secure top talent, along with higher operational costs for recruiting and training that may have a diminished return value since workers could easily change their employment. Commenters also asserted that the projected increase in worker earnings will result in higher consumer prices to offset the new costs to the businesses.

The FTC responded to these concerns by stating they lacked any empirical data to support them. To bolster the agency’s position, the FTC cited a 

 on the effects of varying state laws on healthcare costs. The results showed that, when noncompete agreements are enforced without any checks, it causes higher physician prices, and practice sizes decrease, contrary to what many medical businesses assumed. Addressing the nonprofit/for-profit distinction, the FTC reasoned that any entities outside of the FTC’s jurisdiction that choose to continue to use noncompetes may be at a self-imposed disadvantage in their ability to recruit workers. To address the higher operational costs, the FTC argues that once freed from noncompetes, employees will be more satisfied in their employment, leading to increased productivity and efficiency, which will lead to lower prices.

The FTC also received comments requesting that the medical sector be exempt from the ban, arguing that nuances in the medical industry cannot be accounted for in a sweeping ban of all noncompete agreements. The FTC was ultimately unconvinced of that proposition due to the pervasiveness of noncompetes and their detrimental effects on a large number of healthcare employees. The new rule, however, does carve out a specific exemption for maintaining existing noncompete agreements for senior executives, defined as workers earning more than $151,164 annually who are in policy-making positions, which may apply to certain medical personnel.

Comments from health care employees revealed the extensive negative effects of noncompete agreements in the health care industry. Many comments discussed how noncompetes are contributing to burnout, exacerbating the physician shortage, and consequently limiting patient access to health care. One study showed that physicians who experience symptoms of burnout are 

twice as likely to commit a serious medical error

. With the ban in effect, medical facilities will need to ensure better treatment of their staff to retain employees rather than using contracts to hold them in the same positions.

Furthermore, many physicians who lost the freedom to practice in their community for long periods of time due to provisions in their noncompetes also provided comments. They reported that their physician-patient relationships dissolved and their patients often could no longer receive treatment from the doctor of their choosing unless they had the ability to travel, sometimes appreciable distances. Patients and physicians were aggravated about having to develop new relationships despite the years already spent building trust and familiarity. Banning noncompetes reinstates a physician’s ability to practice wherever they would like in their community, possibly giving patients greater access to health care, lowering price options and increasing lasting personalized services.

The question of whose forecast of the future of medical finances is correct will have to wait to be determined, as the FTC has already faced legal challenges questioning its authority to ban noncompete agreements since the rule was announced. These legal 

 argue that the FTC is overstepping its power as an agency, because only Congress can make rules with such significant economic effects. Essentially, the FTC’s rule nullifies thousands of existing contracts and may be found unconstitutional for exceeding the scope of the FTC’s statutorily permitted authority. 

 before the U.S. Supreme Court could restrain the power of agencies to act within their discretion without explicit permission from Congress, rendering predictions for the outcome of the FTC’s rule difficult. Nonetheless, the Supreme Court striking down the FTC’s rule as an unconstitutional exercise of power is a serious possibility.

Given the complexities of the law, including 

some states and localities that have banned such agreements

, employees subject to noncompete agreements would be wise to seek legal counsel in their respective areas to learn about their options.

The FTC rule becomes effective 120 days after publication, approximately on August 20, 2024, but it is likely to be delayed by the legal challenges.

 represents whistleblowers in federal False Claims Act matters and represents individuals across the country in complex employment litigation and appellate matters involving wrongful termination, wage & hour claims and employer retaliation in response to reporting fraud or misconduct and discrimination on the basis of race, gender, age and sexual orientation. He can be reached at 

 and a juris doctor candidate at The George Washington University Law School focusing on civil rights and employment law.

The FTC's new rule banning noncompete agreements is poised to significantly impact the healthcare industry, pending legal challenges. Noncompetes have traditionally been used to retain trained staff, but many physicians find them restrictive, leading to poor working conditions and disrupted patient care. The FTC argues that banning these agreements will boost competition, create new businesses, and reduce healthcare costs. However, concerns about the rule's impact on staffing, training, and operational costs persist. Legal challenges question the FTC's authority, potentially delaying the rule's implementation until resolved.

Why medical economics may change significantly if FTC noncompete ban is upheld

Private equity in health care: an introduction

Private equity in health care: ‘A different animal’

Private equity in health care: Developing a study

Private equity in health care: Four models of physician employment

Private equity in health care: Picking medical specialties to study

Private equity in health care: Physicians provide the lowest-cost care

Private equity in health care: Measuring quality of care

Private equity in health care: Cost, quality and regulation

Private equity in health care: ‘Don’t regulate us out of existence’

Private equity in health care: Fix the Medicare Physician Fee Schedule

Private equity in health care: More ways to strengthen independent practice

It’s time for doctors, patients and policymakers to rethink some perceptions about private equity investment in health care, according to the 

American Independent Medical Practice Association

In 2024, AIMPA commissioned consultant Avalere to study Medicare fee-for-service data about 

the effects of private equity investment in medical practices

 across five specialties: cardiology, gastroenterology, medical oncology, orthopedics, and urology.

There are some striking results, said Paul Berggreen, MD, AIMPA board chair and president. To start, 

 (PE) affiliated management services organizations (MSOs) have done a really good job controlling costs, promoting quality, and remaining independent, he said.

 are dwarfed by hospitals and corporate practice settings. Yet they have generated a huge amount of public attention – including legislative efforts to bar PE investment.

“I don’t completely understand the momentum in the national conversation saying that this is not a good model,” Berggreen said. “We have proven now with objective data that it is a really good model, and we also feel strongly that competition in the marketplace is a good thing.

“What we’re asking people in the legislatures, around the statehouses and on Capitol Hill: Don’t regulate us out of existence,” he said. “We feel that we are a very important segment of the health care ecosystem.”

In this video series, Berggreen discusses AIMPA, the study, and how private equity-affiliated MSOs can help independent practitioners. The full study, “Medicare Service Use and Expenditures Across Physician Practice Affiliation Models,” remains 

The American Independent Medical Practice Association (AIMPA) advocates for a reevaluation of perceptions regarding private equity (PE) investment in healthcare. A study by Avalere, commissioned by AIMPA, analyzed Medicare fee-for-service data across five specialties, revealing that PE-affiliated management services organizations (MSOs) effectively control costs, promote quality, and maintain physician independence. Despite being smaller than hospitals and corporate practices, PE-affiliated practices face legislative scrutiny. AIMPA emphasizes the importance of competition and urges policymakers not to overregulate this segment of the healthcare ecosystem.

There are different types of PE involvement in health care, and not all are bad, says group of independent practitioners.

Private equity investment can help independent doctors, health care quality, AIMPA says

Burnout and consolidation: an introduction 

Burnout and consolidation: ‘The environment physicians are practicing in has changed dramatically’

Burnout and consolidation: Preserving physician autonomy

Burnout and consolidation: Incentives for health systems to grow

Burnout and consolidation: Smaller, independent practices are gone, and so is joy of being a doctor 

Burnout and consolidation: Physician burnout is not abating

Burnout and consolidation: Feelings of frustration may be moderating a bit

Burnout and consolidation: Making it easier to get mental health aid

Burnout and consolidation: A new generation of feelings about mental health for physicians

Burnout and consolidation: We’re expecting too little of AI

 has been problematic for years in the U.S. health care system, especially for physicians who have the spirit and training to be leaders of patient care.

Business conditions are not likely to alleviate that situation as hospitals and health systems grow into ever larger corporate entities, according to respondents of 

“We're no longer talking about the workplace changing it,” said Foundation President Gary Price, MD, MBA. "It has changed and this has had some enormous implications for both physicians and patients.”

In this video series, Price describes findings from the 2024 survey and discusses the business climate of health care, why it contributes to physician burnout, and 

 that could make American health care better going forward.

Physician burnout remains a significant issue in the U.S. healthcare system, exacerbated by the expansion of hospitals into larger corporate entities. The changing business climate has profound implications for both physicians and patients, as highlighted by The Physicians Foundation 2024 survey. Foundation President Gary Price emphasizes that the workplace has already transformed, impacting healthcare delivery. The survey findings and discussions explore the business environment's role in physician burnout and propose potential solutions to improve the American healthcare system in the future.

Physicians Foundation examined how doctors feel about business environment in health care.

Consolidation can lead to work conditions that add to physician burnout

Value-based payment: An introduction to a study

Value-based payment: Sources and a summary

Value-based payment models, designed to enhance patient health, are not widely adopted by primary care physicians, who predominantly use fee-for-service models. A study by Mathematica, involving primary care physicians and management experts, explored the reasons behind this reluctance. The study, published by The Commonwealth Fund, highlights insights from 14 years of value-based payment models and suggests potential solutions for increased adoption. The findings, discussed by co-author Ann S. O’Malley, MD, MPH, aim to guide future implementation and improve patient outcomes.

Researchers asked doctors why they continue with fee-for-service payment. There are many reasons, as a study co-author explains.

Maclain Joyce

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