Anesthesia Labor Markets and Non-Competes

Introduction

• Host: Justin Harvey
• Podcast: Anesthesia and Pain Management Success (APM Success)
• Episode: 115
• Topics: Labor markets in anesthesia, income, employment, non-competes

Labor Market Evolution

• Current labor market is in a state of flux
• Labor shortages in various fields, including anesthesia
• Hospitals canceling elective cases due to staffing shortages (anesthesiologists, nurses)
• ORs (Operating Rooms) are essential for hospital revenue
• Critical shortage of anesthesia providers (anesthesiologists, CRNAs, AAs)

Non-Competes

• Non-competes are under scrutiny
• Biden’s Executive Order (July 2021) targets non-compete clauses
  • Executive Order on Promoting Competition in the American Economy
  • FTC (Federal Trade Commission) asked to curtail unfair use of non-competes
• State trends, specifically Washington state
  • Rule enacted in 2020: Non-competes unenforceable for W-2 earners < $100K, or 1099 earners < $250K
  • Historical context: Sherman and Clayton Antitrust Acts

FTC’s Role

• FTC: Founded in 1914 to enforce antitrust legislation
• FTC’s mandate: Challenge anti-competitive mergers and practices
• Monitor mergers, business practices to protect consumers

Employee Mobility and Compensation

• Employee rights and mobility gaining attention
• Impact on life decisions: Marriage, children, home buying, etc.
• Employment stability and compensation are key
• Supply constraints among anesthesia professionals
  • Residency seats capped by CMS (Centers for Medicare & Medicaid Services)
  • Baby boomers increasing demand for anesthesia services

Case Study: Bellingham Anesthesia Associates (Washington)

• Consent decree reached between Bellingham Anesthesia Associates and Washington State AG
• Two main allegations:
  1. Exclusive monopolistic contracts
  2. Onerous non-competes
• Details of consent decree:
  • No exclusive contracts in non-acute settings (surgery centers, dental anesthesia)
  • Non-competes reduced:
    • Partners: From 3 years to 18 months
    • Employees: From 18 months to 9 months

Implications for Practice Owners

• Reduced non-competes lead to increased competition
• Potential decrease in business value
• Shift from threat (stick) to employee retention efforts (carrot)
• Increased retention costs

Implications for Employed Physicians

• More job options and flexibility
• Less need to relocate for new jobs
• Potential for better job benefits and perks
• Future partners may face reduced business value and employment certainty

Conclusion

• Trend towards increased employee rights and mobility
• Pros and cons for job seekers and practice owners
• Continued monitoring and updates on this topic promised by the host
• Additional resources available in episode show notes
• Encouragement to visit APM website for more content

Call to Action

• Visit APM Success website
• Leave a review on iTunes

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