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Comment by IG_Semmelweiss | Hacker News Reader

Very curious what's going to happen outside of Technology.

There are many service Industries that implement noncompetes. For example - doctors.

Banning non competes Will add an additional cost to established practices to bring on a new fellow or recently licenced doctor.

Most new doctors are a loss for the new independent practice for the first 2 years. If noncompetes were abolished, the money losing doctor would simply open a new practice once he has a steady book of patients.

I predict lack of noncompetes would push many independent doctors to not hire as many new licenced doctors. Those doctors have to work somewhere, and that means hospitals.

The inevitable results seems to be higher Healthcare costs for all americans

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I am a surgeon currently employed by a private equity group and bound by an absurd non-compete.

None of your points are accurate here from my perspective. Personally, I was profitable within 3 months of my hiring. The longest I've heard of it taking for a physician to become profitable is around 6 months and that's going completely independent. The idea that a doctor is a money-loser for 2 years is absurd. The need for physicians so greatly outstrips demand that I don't see this applying even in large metropolitan areas.

To your second point. The way private practice used to work was a new physician would take a low initial salary in order to be offered the opportunity to become a partner in the practice. The assumption being that for the first few years the new physician is making the partners money. There are a lot of advantages to being a partner in a practice rather than being completely independent and it was worth a few years of a depressed salary in order to be able to purchase equity in an established practice.

What's much more common now is for senior partners to recruit young physicians and then flip their practice to an equity firm after binding them with a non-compete, essentially canibalizing the future of independent private practices in order to ensure themselves a nicer retirement.

Relevant to the discussion is the fact that equity firms, and to a lesser degree hospitals, must chase growth at all costs - inevitably driving up the cost of healthcare. I think this is something that we agree on.

The short answer is that non-competes take power away from independent physicians and give it to equity firms and hospitals. If you sincerely want to see independent physicians flourish then these need to go away as soon as possible. If you read the comments submitted to the FTC you'll see that my perspective is common.

>>> I am a surgeon currently employed by a private equity group

I think you sunk your point right with that statement. If there's a non-provider entity entangled in the cap table, by definition, you are not independent.

Can you explain how an expensive professional that generates 100-300 in a 10 minute visit constitutes a loss for 2 years?

All practices simply cannot just not hire enough doctors unless they want to be unable to service business and lose our long term they have to hire collectively they can't all afford to insert their heads into their anus so smart money is they simply keep hiring like before and nothing changes.

Doctors typically come out of medical school with an eye-watering amount of debt, and most doctors don't make anywhere near as much money as people imagine they do (you can't really tell their pay rate by how much your bill is).

Yes.

Doctors, unless they are high end specialist surgeons in hospitals, do not make net even close to $100 per 10 minutes. That's nonsense.A doctor making $100 per hour would represent $600 per hour x 166 hours = $1.2M in revenues per year. There is no specialty in the US that will drive that much collections in the first 2 years.

But, don't take my word for it. Go look up the avg reimbursement for Level 3 office visit, which is defined as 30 mins. This varies by state and specialty, but its around $90 for medicare or $130 for privates. Again , that is 30mins

Now, consider are talking gross revenue, not actual net profit. So now, lets' talk losses.

The reality is the doctor is really making at best 1/3 of your speculative amount in the 1st year, but only if he's a good doctor with a hot speciality that pays well. SO say $400k best case. If we are talking your avg Pediatrician, slice that by half. The former doctor's salary is somewhere between $250k-300k, the latter prob $200k depending on your market.

That leaves $150k best case, or $0 , respectively.....before COGS and OPEX.

What profit are you thinking about ?

Since neither scheduling nor billing appear to be different for a doctor in their first year vs 17th can you explain why a first year doctor whose salary is less but whom insurers pay just as much for you to see represents a loss?

RE: scheduling actually is better for established doctors. A doctor will move much faster and squeeze in more patients in Yr 3 vs Yr 2, same difference btw Yr 2 and Yr 1.

In my experience, doctors will plateau somewhere around year 3 unless they are actively iterating around software/personnel for smaller improvements.

In addition, the new doctor does not have an established footprint in the community, online (social media, ads) or a trail of good reviews> In short,no book of patients.

The established practice will help filling the schedule of a new doctor, but ultimately it comes to skill with referrals + word of mouth + time.

This example is nonsense. Your math includes only the reimbursement for the office visit. It doesn't include reimbursement of interpreting tests, interpreting imaging or doing procedures.

Yes, but those increase times, and increase costs. Some procedures are not paid (ded, coins), some are not covered (payor), some are not done (no shows). Plus, many times of the day may be idle without patients coming in thru the door.

Plus, my example specifically mentioned revenue. Factoring in procedures, you are still not even close to hitting the per minute profit that was mentioned by parent.

I was only trying to make a point with easily relatable numbers without getting into the thick of it with procedures , reimbursements, specialty avgs, utilization, etc.

You could potentially cover that with a non-solicitation agreement, no?

That seems much fairer than banning the doctor from medicine.

No.

Non solicit covers employees and clients by the contracting parties. It doesn't cover the new doctor opening an office across the street.

The new doctor doesn't run afould a nonsolicit, if all he's literally doing, is opening across the street (and taking clients in the process).

https://www.thebalancemoney.com/non-solicitation-agreements-...

Ultimately the prices of health care are set by insurance companies and the government (e.g. via Medicare), not by any kind of free market mechanism.

Independent doctors are the last bastion of free market mechanism in healthcare.

Insurance may set the amount to pay. But Doctors set the terms of the relationship. Doctors know they don't have to accept crumbs. Doctors are free to reject (and some already do) insurance payments, and also are the only real supplier in the ecosystem positioned to push downward pressure on pricing, particularly vs hospital pricing.

If independent doctors go down, the whole ship goes down.

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