Indiana physician noncompete ban passes Senate committee

A bill to ban new physician noncompete agreements passed the Indiana Senate Health and Provider Services Committee on Jan. 25, Indiana Public Media reported.

Noncompete agreements can prevent workers from working in the same industry for a certain time frame or geographic area, or both. This can leave some physicians without a job until the noncompete expires.

"Can we afford to have physicians sitting on the sidelines waiting out noncompetes that can sometimes last more than a year?" state Sen. Justin Busch said in the report. "Agreements also limit competition, which has contributed to Indiana's record-high cost of care. These agreements slow innovation and constantly disrupt doctor-patient relationships, which are already strained by existing shortages."

However, committee members expressed concern over a total ban, hoping the bill presented on the Senate floor will be amended to soften its effect on employers' ability to use noncompete agreements in certain settings.

Some argued a total ban could increase costs, especially in rural settings.

"A new physician hired on with one of our providers could decide within a short period of time to leave employment and open a new practice literally across the street. The financial hit from this situation could be catastrophic," Cara Veale, CEO of the Indiana Rural Health Association, said in the report. "Without noncompete agreements, the competition to hire physicians will turn into a bidding war. … In most instances, this leads to a losing outcome for rural providers."

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