The battle royale over noncompetes

THE REGULATORS

Hospitals say a Federal Trade Commission plan to ban noncompete agreements will harm patients. Doctors say it’s the other way around.

Whoever’s right, the proposed regulation could have a major impact on the health care marketplace.

“If physicians cannot be bound by noncompetes, that changes the value proposition of much of the vertical health care integration that has taken place over the past two decades,” Erin Fuse Brown, director of the Center for Law, Health & Society at Georgia State University, told Erin.

Lobbying for an exemption: Hospital administrators say they depend on the contracts because their businesses are vulnerable to cutthroat competition for talent while they still grapple with pandemic-driven workforce shortages.

Chad Golder, the American Hospital Association’s deputy general counsel, argues that state governments more attuned to economic conditions in their regions should decide how to regulate employment contracts, adding that a federal rule would increase labor costs, resulting in higher prices for patients.

Doctors respond: Many physicians say that ending noncompetes would benefit patients by restoring a balance of power between doctors and the powerful interests behind many hospitals and mega-physician practices.

The typical noncompete agreement bars doctors from leaving for other employers within easy driving distance. As a result, doctors who want to shop their services can do so, but they must leave their patients behind.

The current system, doctors argue, is just one part of the profit-driven squeeze causing the consolidation of group practices by hospitals and private equity firms.

It has forced doctors to cut back on time spent with their patients and made their daily lives a mix of patient care, phone calls with insurers and bureaucratic paperwork.

The takeaway: If the FTC decides to proceed, the ban would have ramifications across the industry and on patients struggling with the cost and availability of care, doctors seeking the best pay and working arrangements and investors aiming to make money in health care.

What’s next: A public comment period on the FTC proposal ended on April 19. The agency must review the responses before making a final decision.

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Today on our Pulse Check podcast, host Katherine Ellen Foley talks with Megan R. Wilson about the bills the Senate Health, Education, Labor and Pensions Committee will consider next week to enhance access to generic drugs and medications for rare diseases. The package also targets pharmacy benefit managers and their business practices.

WORLD VIEW

The 2021 approval of Mosquirix, the first malaria vaccine, brought hope that more kids could be saved when the shot is added to existing treatments.

But so far it’s not widely available.

Manufacturer GSK expects to deliver 18 million vaccine doses through a contract with UNICEF, with the first 4 million doses due by late this year.

Six million doses would arrive in 2024, and 8 million in 2025. But that’s nowhere near the 40 to 60 million doses needed.

Other options: Another malaria vaccine from Oxford University, produced by the Serum Institute of India, could have a bigger impact.

The R21 vaccine has a much higher efficacy rate than Mosquirix — 75 percent versus about 30 percent against severe disease — and the Serum Institute could produce 200 million doses a year.

Five to 6 million doses are available at the institute’s facility in Pune, said Adrian Hill, the director of the Oxford group leading the vaccine research.

R21 has received regulatory approval in Ghana and Nigeria. The World Health Organization is working on its approval, which could make it available more widely next year, said Gavi, a group that helps bring vaccines to low-income countries.

Why it matters: More than 600,000 people die of malaria each year, and 4 in 5 are children.

More than 30 countries have moderate to high transmission of malaria from the parasite the Mosquirix vaccine works against.

What’s next: Gavi has dedicated $155 million to help countries roll out Mosquirix and says it’s working to help more suppliers produce the vaccine, including in Africa.

It committed to having the poorest countries pay a price of $0.20 per vaccine dose.

WASHINGTON WATCH

Senate Intelligence Committee Chair Mark Warner (D-Va.) said he recently let AI write most of a press release and “it did pretty darn well.”

But Warner still thinks AI makers need to redouble efforts to protect their products’ security.

His AI-written release announced that demand in letters to the tech giants Meta, Microsoft, Google and Apple, as well as to OpenAI, the maker of ChatGPT.

“I see an urgent need to underscore the importance of putting security at the forefront of your work,” Warner wrote.

Warner fears hackers could:

— Tamper with the quality and accuracy of input data

— Poison training data

— Breach algorithms to cause them to make mistakes

Why it matters: Health care companies are increasingly eyeing AI to help offset workforce shortages and ease clinician burden.

Consulting firm Accenture says that half of health care organizations plan to use ChatGPT for learning purposes and more than half will sketch out pilot cases this year.

HHS has proposed regulations that would require health care AI makers and health tech developers that incorporate others’ AI to open up their algorithms to scrutiny if they desire HHS certification.

The Coalition for Health AI, whose members include nonprofit MITRE, Google, Microsoft, Stanford University and Johns Hopkins University, recently released a blueprint to facilitate trust in artificial intelligence’s use in health care.

What’s next: Warner asked for responses from the AI makers to more than a dozen questions about security practices by May 26.