Category Archives: Private Equity

In healthcare’s game of Monopoly, one player will control the board

Posted on by • Posted in Disruption, Disruptive Technology, High Deductible Health Plans, Monopoly, Outcomes, Private Equity, Retail Clinic, Retail Healthcare, Retail Pharmacy, Social Determinants of Health, Strategic Advantage, Strategic Alignment, Strategic Change, Strategy • Leave a comment
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In healthcare, as in life, people devote a lot of time and attention to the way things should be. They’d be better off focusing on what actually could be.

As an example, 57% to 70% of American voters believe our nation “should” adopt a single-payer healthcare system like Medicare For All. Likewise, public health advocates insist that more of the nation’s $4 trillion healthcare budget “should” be spent on combating the social determinants of health: things like housing insecurity, low-wage jobs and other socioeconomic stresses. Neither of these ideas will happen, nor will dozens of positive healthcare solutions that “should” happen.

When the things that should happen don’t, there’s always a reason. In healthcare, the biggest roadblock to change is what I call the conglomerate of monopolies, which includes hospitals, drug companies, private-equity-staked physicians and commercial health insurers. These powerful entities exert monopolistic control over the delivery and financing of the country’s medical care. And they remain fiercely opposed to any change in healthcare that would limit their influence or income.

This article concludes my five-part series on medical monopolies with an explanation of why (a) “should” won’t happen in healthcare but (b) industrywide disruption will.

Why government won’t lead the way

With the U.S. Senate split 51-49 and with virtually no chance of either party securing the 60 votes needed to avoid a filibuster, Congress will, at most, tinker with the medical system. That means no Medicare For All and no radical redistribution of healthcare funds.

Even if elected officials started down the path of major reform, healthcare’s incumbents would lobby, threaten to withhold campaign contributions (which have exceeded $700 million annually for the past three years) and swat down any legislative effort that might harm their interests.

In American politics, money talks. That won’t change soon, even if voters believe it should.

American employers won’t lead, either

Private payers wield significant power and influence of their own. In fact, the Fortune 500 represents two-thirds of the U.S. GDP, generating more than $16 trillion in revenue. And they provide health insurance to more than half the American population.

With all that clout, you’d think business executives would demand more from healthcare’s conglomerate of monopolies. You might assume they’d want to push back against the prevailing “fee for service” payment model, replacing it with a form of reimbursement that rewards doctors and hospitals for the quality (not quantity) of care they provide. You’d think they would insist that employees get their care through technologically advanced, multispecialty medical groups, which deliver superior outcomes when compared to solo physician practices.

Instead, companies take a more passive position. In fact, employers are willing to shoulder 5% to 6% increases in insurance premiums each year (double their average rate of revenue growth) without putting up much or any resistance.

One reason they tolerate hefty rate hikes—rather than battling insurers, hospitals and doctors— involves a surprising truth about insurance premiums. Business leaders have figured out how to transfer much of their added premium costs to employees in the form of high-deductible health plans. A high deductible plan forces the beneficiary to pay “first dollar” for their medical care, which significantly reduces the premium cost paid by the employer.

Businesses also realize that high deductibles will only financially burden employees who experience an unexpected, catastrophic illness or accident. Meaning, most workers won’t feel the sting in a typical year. As for employees with ongoing, expensive medical problems, employers typically don’t mind watching them walk out the door over high out-of-pocket costs. Their departures only reduce the company’s medical spend in future years.

Finally, businesses know that employee medical costs are tax deductible, which cushions the impact of premium increases. So, what starts as a 6% annual increase ends up costing employees 3%, the government 1% and businesses only 2%. In today’s strong labor market, which boasts the lowest unemployment rate in 54 years, businesses are reluctant to demand changes from healthcare’s biggest players—regardless of whether they should.

Leading the healthcare transformation

If there were a job opening for “Leader of the American Healthcare Revolution,” the applicant pool would be shallow.  

Elected officials would shy away, fearing the loss of campaign contributions. Businesses and top executives would pass on the opportunity, preferring to shift insurance costs to employees and the government. Patients would feel overwhelmed by the task and the power of the incumbents. Doctors, nurses and hospitals—despite their frustrations with the current system—would want to take small steps, fearful of the conglomerate of monopolies and the risks of disruptive change.

To revolutionize American medicine, a leader must possess three characteristics:

  1. Sufficient size and financial reserves to disrupt the entire industry (not just a small piece of it).
  2. Presence across the country to leverage economies of scale.
  3. Willingness to accept the risks of radical change in exchange for the potential to generate massive profits.

Whoever leads the way won’t make these investments because it “should happen.” They will take the chance because the upside is dramatically better than sitting on the sidelines.

The likely winner: American retailers

Amazon, CVS, Walmart and other retail giants are the only entities that fit the revolutionary criteria above. In healthcare’s game of monopoly, they’re the ones willing to take high-stakes risks and capable of disrupting the industry.

For years, these retailers have been acquiring the necessary game pieces (including pharmacy services, health-insurance capabilities and innovative care-delivery organizations) to someday take over American healthcare.

CVS Health owns health insurer Aetna. It bought value-based care company Signify Health for $8 billion, along with national primary care provider OakStreet Health for $10.6 billion. Walmart recently entered into a 10-year partnership with the nation’s largest insurance company, UnitedHealth, gaining access to its 60,000 employed physicians. Walmart then acquired LHC, a massive home-health provider. Finally, Amazon recently purchased primary-care provider One Medical for $3.9 billion and maintains close ties with nearly all of the country’s self-funded businesses.

Harvard business professor Clay Christensen noted that disruptive change almost always comes from outsiders. That’s because incumbents cling to overly expensive and inefficient systems. The same holds true in American healthcare.

The retail giants can see that healthcare is exorbitantly priced, uncoordinated, inconvenient and technologically devoid. And they recognize the hundreds of billions of dollars of revenue and they could earn by offering a consumer-focused, highly efficient alternative.

How will the transformation happen?

Initially, I believe the retail giants will take a two-pronged approach. They’ll (a) continue to promote fee-for-service medical services through their pharmacies and retail clinics (in-store and virtual) while (b) embracing every opportunity to grow their market share in Medicare Advantage, the capitated option for people over age 65.

And within Medicare Advantage, they’ll look for ways to leverage sophisticated IT systems and economies of scale, thus providing care that is better coordinated, technologically supported and lower cost than what’s available now.

Rather than including all community doctors in their network, they’ll rely on their own clinicians, augmented by a limited cohort of the highest-performing medical groups in the area. And rather than including every hospital as an inpatient option, they’ll contract with highly respected centers of excellence for procedures like heart surgery, neurosurgery, total-joint replacement and transplants, trading high volume for low prices.

Over time, they’ll reach out to self-funded businesses to offer proven, superior clinical outcomes, plus guaranteed, lower total costs. Then they’ll make a capitated model their preferred insurance plan for all companies and individuals. Along the way, they’ll apply consumer-driven medical technologies, including next generations of ChatGPT, to empower patients, provide continuous care for people with chronic diseases and ensure the medical care provided is safe and most efficacious.

Tommy Lasorda, the long-time manager of the Los Angeles Dodgers, once remarked, “There are three types of people. Those who watch what happens, those that make it happen and those who wonder what just happened.”

Lasorda’s quip describes healthcare today. The incumbents are watching closely but failing to see the big picture as retailer acquire medical groups and home health capabilities. The retail giants are making big moves, assembling the pieces needed to completely transform American medicine as we think of it today. Finally, tens of thousands of clinicians and thousands of hospital administrators are either ignoring or underestimating the retail giants. And, when they get left behind, they’ll wonder: What just happened?

The conglomerate of monopolies rule medicine today. Amazon, CVS and Walmart believe they should rule. And if I had to bet on who will win, I’d put my money on the retail giants.

Which physician specialties are most targeted for corporate roll-ups?  

Posted on by • Posted in Health System, Hospital, Hospital Industry, Outpatient Care, Physician, Physician Aggregator, Physician Compensation, Physician Employment, Physician Independence, Physician Practice Management, Physician Practice Valuation, Physician Workforce, Private Equity • Leave a comment

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In the last edition of the Weekly Gist, we illustrated how non-hospital physician employment spiked during the pandemic. Diving deeper into the same report from consulting firm Avalere Health and the nonprofit Physicians Advocacy Institute, the graphic above looks at the specialties that currently have the greatest number of physicians employed by hospitals and corporate entities (which include insurers, private equity, and non-provider umbrella organizations), and those that remain the most independent.


To date, there has been little overlap in the fields most heavily targeted for employment by hospitals and corporate entities. Hospitals have largely employed doctors critical for key service lines, like cancer and cardiology, as well as hospitalists and other doctors central to day-to-day hospital operations.

In contrast, corporate entities have made the greatest strides in specialties with lucrative outpatient procedural business, like nephrology (dialysis) and orthopedics (ambulatory surgery), as well as specialties like allergy-immunology, that can bring profitable pharmaceutical revenue.

Meanwhile, only a few specialties remain majority independent. Historically independent fields like psychiatry and oral surgery saw the number of independent practitioners fall over 25 percent during the pandemic.

While hospitals will remain the dominant physician employer in the near term, corporate employment is growing unabated, as payers and investors, unrestrained by fair market value requirements, can offer top dollar prices to practices. 

Fewer medical students pursuing emergency medicine

Posted on by • Posted in Emergency, Emergency Care, Emergency Room Staffing, Labor Spend Management, Medical School, Physician, Physician Aggregator, Physician Burnout, Physician Compensation, Private Equity, Profit Motive • Leave a comment

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With recent residency match data showing a 26 percent drop in applications to emergency medicine training programs since 2021, this article in the Washington Post grapples with why the once sought-after profession is now struggling with recruitment. 

Some point to high rates of pandemic burnout and the unappealing nature of the work: emergency departments (EDs) are increasingly overcrowded, understaffed, and violent—turning ED docs into “the cops of medicine,” as one ED residency program leader put it. Others suggest that residents are simply following the money elsewhere, discouraged by reports of an impending oversupply of ED physicians in coming years.

The Gist: The days of the television drama ER, which inspired a generation of would-be doctors to pursue emergency medicine, are gone—most  medical students graduating today weren’t even born when the show first aired in 1994. The article fails to note the changes in EDs brought on by investor-backed staffing companies, which now staff anywhere from an estimated quarter to half of the nation’s EDs. 

They’re accused of cutting costs by hiring fewer ED docs, as well as funding more ED residency spots in an attempt to flood the market and drive down their future labor costs even further. In the wake of COVID, emergency physicians find themselves in EDs largely staffed by advanced practice providers.

While in the near-term hospitals will surely face challenges in staffing these critical roles, shortages may drive momentum to refine and expand technology- and team-based care models. 

Non-hospital physician employment rose sharply during pandemic 

Posted on by • Posted in Market Consolidation, Medicare Advantage, Pandemic, Physician, Physician Employment, Physician Independence, Private Equity • Leave a comment

https://mailchi.mp/28f390732e19/the-weekly-gist-march-10-2023?e=d1e747d2d8

While hospitals, payers, and private equity firms have long been competing to acquire independent physician groups, the COVID pandemic spurred a marked acceleration of the physician employment trend, with non-hospital corporate entities leading the charge.

The graphic above uses data released by consulting firm Avalere Health and the nonprofit Physicians Advocacy Institute to show that nearly three quarters of American physicians were employed by a larger entity as of January 2022, up from 62 percent just three years prior. 

While hospitals employ a majority of those physicians, corporate entities (a group that includes payers, private equity groups, and non-provider umbrella organizations) have been increasing their physician rolls at a much faster rate. 

Corporate entities employed over 40 percent more physicians in 2022 than in 2019, and in the southern part of the country—a hotspot for growth of Medicare Advantage—corporate physician employment grew by over 50 percent.

We expect the move away from private practice, accelerated by the pandemic, will only continue as physicians seek financial returns, secure a path to retirement, and look to access capital for necessary investments to help grow and manage the increasing complexities of running a practice. 

Physician Arms Race

Posted on by • Posted in Health Insurance Industry, Market Consolidation, Market Power, Market Trends, Medicare Advantage, Physician Arms Race, Primary Care, Primary Care Delivery Model, Primary Care Strategy, Private Equity, Vertical Integration • Leave a comment

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After rumors of a possible deal first surfaced in early January, CVS Health announced on Wednesday that it has entered into a definitive agreement to acquire value-based primary care provider Oak Street Health for $10.6B. The Chicago-based company will join CVS’s recently formed Health Care Delivery organization, bringing with it roughly 600 physicians and nurse practitioners working at 169 senior-focused clinics in 21 states. This move is the latest by CVS to expand its care offerings, following its $100M investment last month in primary and urgent care provider Carbon Health, and its $8B acquisition of in-home evaluation company Signify in September.

The Gist: If this deal goes through, CVS will have the key pieces of the national primary care physician network it needs for a value-based care platform focused on Medicare Advantage—although how they will combine Oak Street’s clinics with retail-based HealthHUBs and other primary care assets remains unclear.

The fact that CVS is paying about a 50 percent share price premium shows how competitive the market for large physician organizations has become, driving up bidding prices such that only cash-rich payers, pharmacies, and retailers can afford them as they seek to emulate UnitedHealth Group’s Optum strategy.

Of note, the same day CVS announced the deal, Aetna competitor and erstwhile investor in Oak Street, Humana announced a five-year network partnership with Oak Street competitor ChenMed.

We’ll be watching for whose strategy proves most effective as we enter the next phase of the physician arms race between vertically-integrated payers, and the emphasis shifts from how many providers are employed to how they’re integrated and deployed.

Has the backlash against physician employment begun?

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Given the economic situation most hospitals face today, it was only a matter of time before we started to hear comments like we heard recently from a system CEO. 

“We’ve got to pump the brakes on physician employment this year,” she said. “This arms race with Optum and PE firms has gotten out of control, and we’re looking at almost $300K per year of loss per employed doc.”

 Of course, that system (like most) has been calling that loss a “subsidy” or an “investment” for the past several years, justified by the ability to pursue an integrated model of care and to grow the overall system book of business.

But with non-hospital competitors unfettered by the requirement to pay “fair market value” for physicians, the bidding war for doctors has become unsustainable for many hospitals. Around half of physicians are now employed by hospitals, with many more employed in other corporate settings.

There’s a growing sense that the pendulum has swung too far in the direction of employment, and now the phrase “stopping the bleed”—commonplace in the post-PhyCor days of the early 2000s—has begun to ring out again.
 
One challenge: finding ways to talk openly about “pumping the brakes” with the board, given that most systems have key physician stakeholders as part of their governance structure. Twice in the last month we’ve had CEOs ask us about reconfiguring their boards so that there are fewer doctors involved in governance—a sharp about-face from the “integration” narrative of just a few years ago.

It’s a tricky balance to strike. We recently heard a fascinating statistic that we’re working to verify: a third of all hospital CEO turnover in the last year was driven by votes of no-confidence by the medical staff. True or not, there’s no doubt that running afoul of physicians can be a career-limiting move for hospital executives, so if we’re about to enter an era of dialing back physician employment strategies, it’ll be fascinating to see how the conversations unfold. We’ll continue to keep an eye on this shift in direction and would love to know what you’re hearing as well, and to discuss how we might be of assistance in navigating what are sure to be a series of difficult choices.

Call coverage woes surface again

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Recent conversations with executive teams about physician issues have made us feel like we’ve time-travelled back to 2006. Both health systems and large independent physician groups report having difficulties hiring physicians willing to take call, even among specialties where it has long been part of the job expectations.

“We stopped paying for call fifteen years ago,” one CMO shared. “But now, even though we’ve started paying again, it’s hard to get takers.” While procedural specialties seem to be the hardest to cover, with orthopedics, urology, and GI cited most frequently, we’re also hearing challenges with medical specialty coverage. One hospital CEO (who lamented that call coverage had once again risen to a CEO-level problem) shared that cardiologist candidates were looking for positions without call obligations. 
 
The knee-jerk reaction of older executives is to blame a younger generation of doctors seeking more work-life balance. Surely this contributes, but as one astute medical group CEO pointed out, the only way doctors can draw this line in the sand with health systems is if there are alternatives that don’t require call.

He referenced the growing number of investor-backed specialty practices focused squarely on outpatient growth and even offering doctors no-call positions straight out of training. In his market, he felt these doctors were discouraged from taking call: “When 80 percent of the procedures are done in a surgery center, an orthopod doesn’t need referrals from call to fill his schedule with new patients. And the patients they encounter in our ED are more likely to be uninsured or government pay, so they don’t want them anyway.”

Beyond simply paying for call, a few other solutions are gaining traction. Some hospitals are expanding the number of in-house, hospitalist-like positions for other specialties. Others are deploying virtual consult services with some success, even in procedural specialties. As one orthopedic surgeon told us, the virtual call coverage does a decent job with triage and can often save the doctor from having to come in overnight. 

Ultimately, as the number of investor-owned specialty groups expands, health systems must develop collaborative relationships to solve care delivery challenges across the continuum. 

Inside the current urgent care ‘boom’

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Urgent care centers have become increasingly popular among patients in recent years. And while the facilities may be a more convenient care option than others, experts have voiced concerns about potential downsides, Nathaniel Meyersohn writes for CNN.

What is driving the urgent care ‘boom’?

Urgent care centers have been in the United States since the 1970s, but they were widely regarded as “docs in a box,” with slow growth in their early years. Then, during the COVID-19 pandemic, demand for tests and treatments drove an increase in patients at urgent care sites around the country. According to the Urgent Care Association (UCA), patient volume at urgent care centers has increased by 60% since 2019.

As patient volumes and demand increased, growth for new urgent care centers surged. Currently, there are a record 11,150 urgent care centers in the United States, with around 7% growth annually, UCA said. Notably, this figure excludes clinics inside retail stores and freestanding EDs.

According to estimates from IBISWorld, the urgent care market will reach roughly $48 billion in revenue in 2023, a 21% increase from 2019.

“Urgent care has grown rapidly because of convenience, gaps in primary care, high costs of emergency room visits, and increased investment by health systems and private-equity groups,” Meyersohn writes.

Urgent care center growth also “highlights the crisis in the US primary care system,” Meyersohn writes, noting that the Association of American Medical Colleges said it expects a shortage of up to 55,000 primary care physicians in the next decade.

In addition, it can be difficult to book an immediate visit with a primary care provider. Urgent care sites have longer hours during the week and are open on weekends, making it easier to get an appointment. According to UCA, roughly 80% of the U.S. population is within a 10-minute drive of an urgent care center.

“There’s a need to keep up with society’s demand for quick turnaround, on-demand services that can’t be supported by underfunded primary care,” said Susan Kressly, a retired pediatrician and fellow at the American Academy of Pediatrics.

Meanwhile, health insurers and hospitals have also prioritized keeping people out of the ED. In the early 2000s, they started opening their own urgent care sites and implementing strategies to deter ED visits.

The passage of the Affordable Care Act also triggered an increase in urgent care providers, with millions of newly insured Americans accessing healthcare.

In addition, data from PitchBook suggests that private-equity and venture capital funds invested billions into deals for urgent care centers.

“If they can make it a more convenient option, there’s a lot of revenue here,” said Ateev Mehrotra, a professor of healthcare policy and medicine at Harvard Medical School who has researched urgent care clinics. “It’s not where the big bucks are in health care, but there’s a substantial number of patients.”

The increase in urgent care sites may present challenges

Many doctors, healthcare advocates, and researchers have voiced concerns at the increase in urgent care sites, noting that there are potential downsides.

“Frequent visits to urgent care sites may weaken established relationships with primary care doctors,” Meyersohn writes. “They can also lead to more fragmented care and increase overall health care spending, research shows.”

In addition, some experts have questioned the quality of care at urgent care centers, particularly how well they serve low-income communities.

In a 2018 study by Pew Charitable Trusts and CDC, researchers found that urgent care centers overprescribe antibiotics, especially those used to treat common colds, the flu, and bronchitis.

“It’s a reasonable solution for people with minor conditions that can’t wait for primary care providers,” said Vivian Ho, a health economist at Rice University. “When you need constant management of a chronic illness, you should not go there.”

Some doctors and researchers also expressed concern that patients are visiting urgent care centers instead of a primary care provider altogether.

“What you don’t want to see is people seeking a lot [of] care outside their pediatrician and decreasing their visits to their primary care provider,” said Rebecca Burns, the urgent care medical director at the Lurie Children’s Hospital of Chicago.

“There are also concerns about the oversaturation of urgent care centers in higher-income areas that have more consumers with private health care and limited access in medically underserved areas,” Meyersohn writes.

A 2016 study from the University of California at San Francisco found that urgent care centers typically do not serve rural areas, areas that have a high concentration of low-income patients, or areas that have a low concentration of privately-insured patients.

According to the researchers, this “uneven distribution may potentially exacerbate health disparities.” 

Be Ready for the Reorganized Healthcare Landscape

Posted on by • Posted in Board, Business Model, CEO, Change, Change Management, Change Mindset, Leadership, Medicare Advantage, Mindset, Physician Compensation, Physician Employment, Physician Leadership, Physician Network, Physician Practice Acquisition, Physician Practice Management, Private Equity, Strategic Issue, Strategic Leadership, Strategy, Value Based Care Model, Value-Based Care Functions, Value-Based Contracting, Value-Based Healthcare • Leave a comment

Click to access Industry_Insights_1.25.23.pdf

Running a health system recently has proven to be a very hard job. Mounting losses in the face of higher operating expenses, softer than expected volumes, deferred capex, and strained C-suite succession planning are just a few of the immediate issues with which CEOs and boards must deal.


But frankly, none of those are the biggest strategic issue facing health systems. The biggest
strategic issue is the reorganization of the American healthcare landscape into an ambulatory care
business that emphasizes competing for covered lives at scale in lower cost and convenient settings
of care. This shift in business model has significant ramifications, if you own and operate acute care
hospitals.


Village MD and Optum are two of the organizations driving the business model shift. They are
owned by large publicly traded companies (Walgreens and UnitedHealth Group, respectively). Both
Optum and Village MD have had a string of announced major patient care acquisitions over the past
few years, none of which is in the acute care space.


The future of American healthcare will likely be dominated by large well-organized and well-run
multi-specialty physician groups with a very strong primary care component. These physician
service companies will be payer agnostic and focused on value-based care, though will still be
prepared to operate in markets where fee-for-service dominates. They will deliver highly
coordinated care in lower cost settings than hospital outpatient departments. And these companies
will be armed with tools and analytics that permit them to manage the care for populations of
patients, in order to deliver both better health outcomes and lower costs.


At the same time this is happening, we are experiencing steady growth in Medicare Advantage.
And along with it, a stream of primary care groups who operate purpose-built clinics to take full risk
on Medicare Advantage populations. These companies include ChenMed, Cano Health and Oak
Street, among others. These organizations use strong culture, training, and analytics to better
manage care, significantly reduce utilization, and produce better health outcomes and lower costs.


Public and private equity capital are pouring into the non-acute care sectors, fueling this growth. As
of the start of 2022, nearly three quarters of all physicians in the US were employed by either
corporate entities (such as private equity, insurance companies, and pharmacy companies), or
employed by health systems. And this employment trend has accelerated since the start of the
pandemic. The corporate entities, rather than health systems, are driving this increasing trend.
Corporate purchases of physician practices increased by 86% from 2019 to 2021.


What can health systems do? To succeed in the future, you must be the nexus of care for the
covered lives in your community. But that does not mean the health system must own all the
healthcare assets or employ all of the physicians. The health system can be the platform to convene these assets and services in the community. In some respects, it is similar to an Apple iPhone. They are the platform that convenes the apps. Some of those apps are developed and owned by Apple. But many more apps are developed by people outside of Apple, and the iPhone is simply the platform to provide access.


Creating this platform requires a change in mindset. And it requires capital. There are many opportunities for health systems to partner with outside capital providers, such as private equity, to position for the future – from both a capital and a mindset point of view.


The change in mindset, and the access to flexible capital, is necessary as the future becomes more and more about reorganizing into an ambulatory care business that emphasizes competing for covered lives at scale in lower cost and convenient settings of care.

FTC proposes banning noncompete agreements

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https://mailchi.mp/59374d8d7306/the-weekly-gist-january-13-2023?e=d1e747d2d8

Last Thursday, the Federal Trade Commission (FTC) released a proposed rule that would ban employers from imposing noncompete agreements on their employees. Noncompetes affect roughly 20 percent of the American workforce, and healthcare providers would be particularly impacted by this change, as far greater shares of physicians—at least 45 percent of primary care physicians, according to one oft-cited study—are bound by such agreements.

The rulemaking process is expected to be contentious, as the US Chamber of Commerce has declared the proposal “blatantly unlawful”. While it is unclear whether the rule would apply to not-for-profit entities, the American Hospital Association has released a statement siding with the Chamber of Commerce and urging that the issue continue to be left to states to determine.

The Gist: Should this sweeping rule go into effect, it would significantly shift bargaining power in the healthcare sector in favor of doctors, allowing them the opportunity to move away from their current employers while retaining local patient relationships.

The competitive landscape for physician talent would change dramatically, particularly for revenue-driving specialists, who would have far greater flexibility to move from one organization to another, and to push aggressively for higher compensation and other benefits.

Given that the FTC cited suppressed competition in healthcare as an outcome of current noncomplete agreements, the burden will be on organizations that employ physicians—including health systems and insurers, as well as private equity-backed corporate entities—to prove that physician noncompetes are essential to their operations and do not raise prices, as the FTC has suggested.