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State licensing

Slowly, the states followed by expanding

Introduction

the scopes of practice of nonphysician clini-

laws require

cians. Many states adopted laws to allow nurse

physicians for

In the United States, the authority to regu-

practitioners to practice independently and to

tasks that could

late medical professionals lies with the states. To

prescribe controlled substances--tasks histori-

practice within a state, clinicians must obtain a

cally reserved for physicians. The fact that

be performed by

license from that state's government. State

nonphysician clinicians could provide certain

less-skilled

statutes dictate standards for licensing and dis-

types of care for less money than physicians

ciplining medical professionals. They also list

led to the broader use of such mid-level pro-

professionals.

tasks clinicians are allowed to perform (called a

fessionals in all aspects of health care.

clinician's "scope of practice"). One view is that

Organizations representing mid-level clini-

state licensing of medical professionals assures

cians--including nurse practitioners, physi-

quality. Another view is that licensing is ineffec-

cian assistants, nurse midwives, physical ther-

tive and makes consumers worse off.

apists, podiatrists, and optometrists, among

States first began to license physicians in

many others--continue to advocate broader

the early part of the 20th century. In effect,

scopes of practice for their members, ostensi-

states handed the administration of physi-

bly to increase access to care. However, these

cian-licensing laws to state boards composed

same groups are less concerned about access

of physicians. Likewise, states vested over-

to care when it comes to the role of other clin-

sight of medical school accreditation in the

icians. And they are anxious to raise education

American Medical Association, which repre-

requirements for new entrants to their profes-

sents the interests of physicians.

sions. Such requirements clearly reduce access.

Many observers have suggested that licens-

An important question is whether such

ing laws give physicians too much power.

determinations even belong in the political

Leading economists--including Nobel Laureate

arena, where decisions are subject to intense

Milton Friedman and University of Chicago

lobbying by parties whose interests might not

professor Reuben Kessel--have argued that

align with those of consumers. Researchers at

state licensing laws unnecessarily restrict the

the University of California, San Francisco,

supply of medical care.1 In his 1963 article on

Center for the Health Professions observe,

health economics in the American Economic

"Interest groups with strong lobbies play a sig-

Review, Nobel Laureate Kenneth Arrow noted

nificant role in shaping [scope-of-practice] leg-

islation."5

that state licensing laws were needlessly restric-

Any group of mid-level clinicians that can

tive, requiring physicians to perform tasks that

sway legislators can get its scope of practice

could be performed ably and less expensively by

less-skilled professionals.2 From this point of

expanded or increase education require-

view, liberalizing state licensing laws could

ments for new entrants. Alternatively, a pow-

make health care more available and less expen-

erful physician lobby can block changes to

sive without harming quality.

the scopes of practice of mid-level practition-

It took growing healthcare costs to moti-

ers that would impinge on its members' turf.

vate partial liberalization. Following the pas-

In this paper, I argue that these determina-

sage of Medicare and Medicaid legislation in

tions do not belong in the political arena.

the United States in 1965, the demand for

State oversight of medical licensing and scope

physician services increased dramatically. To

of practice has negative consequences for con-

keep costs down, politicians at the federal lev-

sumers. Consumers would benefit were states

el reduced entry barriers for foreign-trained

to eliminate professional licensing in medi-

physicians.3 In 1972, nearly 45 percent of

cine and leave education, credentialing, and

newly licensed physicians in the United

scope-of-practice decisions to the private sec-

States were foreign-trained, up from approx-

tor and the courts.

imately 20 percent in the 1960s.4

2