U.Va. adds ‘non-competition’ clause for employees

CHARLOTTESVILLE — The University of Virginia Medical Center is adding “non-competition” clauses to the employment agreements of its 800 clinical faculty members — a move that one U.Va. physician criticized as bad for health care in the Charlottesville region.

Under the new policy, clinical faculty involved in primary care — such as pediatrics or family medicine — are prohibited from practicing medicine within a 15-mile radius for one year after leaving employment with U.Va.

Clinical faculty who practice in more specialized fields cannot work within 50 miles for a year after leaving U.Va.

Augusta Health falls within the 50-mile radius. The Fishersville hospital is a 32-mile drive from the U.Va. Medical Center.

Word of U.Va. implementing the non-compete clause comes eight months after the former Augusta Medical Center – the hospital changed its name over the summer – raised eyebrows in Charlottesville with a pair of bold March moves.

In one, Augusta announced plans to hire three cardiologists to perform interventional procedures previously handled by a U.Va. interventional cardiologist.

“It would have been our preference that Augusta Medical Center not change that arrangement, but they have the right to do so, and they exercised the rights that they have,” Larry Fitzgerald, chief financial and business development officer at the U.Va. Medical Center, told the Media General News Service earlier this year.

In addition, Augusta opened an internal medicine practice in Crozet, its first office in western Albemarle County. The Crozet office is a less than 20-mile drive from U.Va.’s doorstep.

Fitzgerald said Crozet and Albemarle County in general are clearly parts of U.Va.’s primary service area, which is defined in the industry as the area providing 50 percent of a center’s patients. U.Va. has had its own facility in Crozet for almost two years.

Peter Jump, a U.Va. hospital spokesman, said the new policy aims to stop physicians from leaving U.Va. to set up a nearby practice or to take a job with a competing hospital.

“Physicians come here, we set up their practice, they see our patients and then they leave and many of the patients go with them,” Jump said. “We invest a lot of money, time and effort helping you get your practice established, but then you leave and take your patients with you to the detriment of U.Va..”

In 2005, U.Va.’s entire in-vitro fertilization clinic left the university and moved across town to Martha Jefferson Hospital. Such a move, Jump said, can deprive U.Va.’s medical students of valuable learning experiences.

U.Va.’s new policy is not unusual for teaching hospitals. Jump said the university polled 28 similar teaching hospitals and found that 26 had non-compete policies, one did not and one could not respond because it was forbidden by state law.

One physician who has worked at U.Va. for 20 years, who spoke on the condition of anonymity, said the hospital’s new policy will reduce health care competition and might lead to some physicians leaving the Charlottesville area for opportunities elsewhere.

“This could restrict access to good doctors,” the physician said. “It could drive doctors out of the community.”

Jump disagreed, saying U.Va.’s non-competition policy would not reduce competition for health care in the Charlottesville region, which is home to several hospitals and numerous independent medical practices.

“We don’t think it’s going to be detrimental to competition,” Jump said.

Hospitals are allowed to implement non-compete clauses so long as the policy is reasonable in its duration and geographic area, said Robert Mills of the American Medical Association.

“The courts have backed the notion that these restrictive covenants are OK so long as they are not overly broad,” Mills said.

Massachusetts, Delaware and Colorado, however, have all enacted statutes that invalidate physician non-compete clauses in those states.

Medical centers generally add non-compete policies to protect revenue, their patient base and their investment - such as recruiting costs, moving expenses and opportunity costs - in their employees.

It is unclear if Martha Jefferson Hospital has a similar policy. Hospital spokeswoman Jennifer McDaniel would not say, citing confidentiality rules.

“Contracts are confidential,” she said. “That’s between human resources and the employee.”

Brian McNeill is a staff writer for the Daily Progress in Charlottesville.

The News Virginian contributed to this story.