Tools to Challenge Big Medicine: Strengthen Antitrust Monopsony Enforcement for Healthcare Workers

The Problem

Many corporate or dominant healthcare systems use their positions in labor markets to suppress wages, degrade working conditions, provide worse benefits, and prevent workers from switching jobs to pursue better opportunities. This “monopsony” power occurs when a buyer has power — in this case, the healthcare systems use their power as a buyer of labor to harm workers.

Traditional antitrust law tends to ignore this sort of anti-competitive behavior and abuse. Guided by a “consumer welfare standard” for the past 40 years, federal antitrust law primarily seeks to intervene when consumers are harmed by higher prices, but generally ignores when workers are hurt through anti-competitive business and employer practices.

Similarly, many employers in healthcare use their advantaged bargaining position relative to healthcare workers to create unfair and anti-competitive employment terms. These include:

  • Noncompetes, which prohibit employees from switching to work for competing healthcare providers, closing off important employment opportunities;
  • No-poach agreements, in which different employers agree to not hire each other’s employees, so that healthcare workers have fewer opportunities;
  • Arbitration agreements, which prevent employees from having access to justice in court; and
  • Training Repayment Agreement Provisions (TRAPs), which require that healthcare workers pay their employers back for the costs of their own training. These are particularly common in healthcare.

The Solution

To diminish employers’ unfair control over healthcare labor markets, states can incorporate specific standards into any potential state antitrust law to enforce against the harms and abuses from monopsony power.

In strengthening antitrust protections for workers, states can also clearly state that unfair and anti-competitive employment practices — such as noncompete agreements, no-poach agreements, arbitration agreements, or training retention agreements (TRAPs) — are plainly prohibited as an abuse of dominance by the employer.