American Academy of Cosmetic Surgery

What the FTC’s New Rule Will Mean to the Healthcare Industry

The FTC’s rule regarding noncompete clauses aims to transform healthcare by enhancing employee mobility, increasing compensation, and (for reasons that are unclear to me given the higher anticipated wages) thereby reducing healthcare spending “by an estimated $74 billion to $194 billion” over the next decade. This extensive rule is “encapsulated” (their word, not mine) in a 560-page report (CLICK HERE to read the FTC’s final noncompete rule), which emphasizes its significant impact on the healthcare sector, supported by numerous comments from various healthcare trade groups.

Healthcare businesses rely heavily on a highly trained workforce. They historically have utilized noncompete agreements to secure capital for expanding services and infrastructure. These agreements ensured the retention of key personnel, but the new rule will allow healthcare professionals to switch jobs more freely, likely increasing labor costs.

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