Reform Regulation of Health Care Providers

The COVID-19 pandemic made state and federal lawmakers acutely aware of how state‐​based regulation of clinicians contributes to the overall shortage of health care providers and obstructs their rapid response to public health emergencies.

Reform Regulation of Health Care Providers
  • Delivering Health Care across State Lines
  • Adding Experienced International Medical Graduates to the Provider Pool
  • Replacing Licenses with Certification
  • Conclusion

This essay is a part of the Pandemics and Policy series.

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States should

  • enact laws granting reciprocal recognition to licenses held by health care practitioners already licensed in any of the 50 states or the District of Columbia;
  • grant reciprocal health care licenses to more international medical school graduates who are experienced and licensed to practice in other countries; and
  • consider replacing licensure with certification.

Congress should

  • for the purposes of promoting telemedicine, define the “locus of care” as the state in which a practitioner is located as opposed to where a consumer resides; and
  • to the extent consistent with its powers to tear down barriers to interstate commerce, require states to allow health care practitioners who have licenses in good standing in any of the 50 states or the District of Columbia to render in‐​person care within their borders; states may still require a state license to providers who establish a permanent in‐​state location.

The COVID-19 pandemic is exacerbating the problem of health care access. Shelter‐​in‐​place orders, restrictions on nonemergency medical treatment, and the public’s fear of contagion are forcing many small medical practices to close. At the same time, the COVID-19 crisis has dramatically underscored the importance of being able to rapidly shift practitioners to areas of acute need.

State licensing laws impede the free flow of health care practitioners to where patients need them. In several of the states hardest hit by the pandemic, governors suspended state licensing requirements, allowing practitioners licensed in any state to come to the aid of other states’ residents. These emergency actions tacitly recognize a pressing problem: state clinician licensing laws block access to care. When the crisis recedes, the state‐​based licensing regime should not return to the status quo ante.

Some states have already enacted laws granting reciprocal recognition to occupations and professions that establish location within their jurisdictions and hold licenses in other states. In early 2019, Arizona became the first state to do so. Montana and Pennsylvania have since enacted similar laws. Reform is in progress in Missouri. The remaining states and the District of Columbia should also grant reciprocity to out‐​of‐​state license holders who establish offices within their jurisdictions.

Such reform would make it much easier for health care practitioners to provide services to patients in various parts of the country. However, state requirements that health care providers establish physical locations within respective states limit this reform. Under our federal system, states retain the police power to license and regulate occupations and professions within their borders. State lawmakers in all 50 states and the District of Columbia should remove any provisions in licensing reform laws that make reciprocity contingent on establishing offices within their jurisdictions.

Delivering Health Care across State Lines

Patients can travel to another state to receive medical treatment and even surgery from a doctor licensed in that state, but those doctors cannot travel to the patients’ states to provide the same services unless they are licensed in those states.

The social distancing measures required to address the COVID-19 pandemic led to a newfound appreciation for the use of telemedicine, a technological advance that has been available for several decades. State licensing laws for health care practitioners have impeded the widespread use of telemedicine. Most states require that health care practitioners provide telemedicine only to patients in the state in which those providers are licensed, a barrier to the free flow of health care services across state lines.

Many states suspended that requirement for the duration of the ongoing public health emergency. When the emergency passes, the barriers will return. To the extent consistent with its authority to tear down barriers to interstate commerce under Article 1, Section 8 of the Constitution, Congress should define the “locus of care” as the state in which the practitioner is located as opposed to the state in which the consumer of the service resides. While states have constitutional authority to regulate the practice of medicine for residents within their borders, crossing state lines to provide telemedicine or short‐​term in‐​person care can reasonably be classified as interstate commerce. This change would increase access to care and allow patients to utilize expertise that may exist in areas of the country otherwise beyond their reach. It would also remove the protection from out‐​of‐​state competitors that health care providers otherwise enjoy. The increased competition would redound to the benefit of patients.

Congress should also apply this definition of the locus of care to practitioners licensed in one state who provide in‐​person care in a state where they do not have a permanent location. Examples of providers to whom such an act would apply include those who usually work through agencies to provide care during short stints in medically underserved areas, those located very close to the border of a neighboring state, and out‐​of‐​state experts in rare and specialized medical conditions brought in to consult and help manage a fragile patient unstable for transfer. These examples are analogous to telemedicine practice.

Possessing an out‐​of‐​state license would not automatically enable a health care provider to practice at any health care facility within a new state. Health care facilities perform their own due diligence in vetting and credentialing health care staff applicants. The same vetting process could just as easily be performed on an applicant for staff privileges who is licensed in another state. That happens now when a provider relocates from another state after obtaining a license in the new state.

Defining the locus of practice as the state in which a health care practitioner is licensed would make it easier for locum tenens (“fill in”) providers and out‐​of‐​state specialists to provide itinerant temporary health services to remote and underserved communities, free from the burden of licensing applications and fees in the several states where these communities reside. In the event that a practitioner establishes an office within a state, the practitioner would then become subject to applicable state‐​based practitioner licensing laws.

Adding Experienced International Medical Graduates to the Provider Pool

International medical school graduates who have completed postgraduate specialty training and are licensed to practice in other countries face significant barriers to practicing in the United States. U.S. state licensing boards require international medical graduates to repeat their entire postgraduate training in an accredited U.S. institution before receiving a state medical license. Many experienced foreign‐​trained doctors take ancillary medical field positions, such as nurse, lab technician, and radiology technician, instead of starting over. Some even work as waiters or taxi drivers.

To be sure, the quality and approach to the practice of medicine varies in different parts of the world. In some parts, doctors deal with a different constellation of health problems than exist in the United States, and some may have less exposure to the technological advances that abound in the U.S. health care system. There may also be cultural differences that affect their understanding and communication with American patients. For this reason, private certification organizations, such as the Educational Commission for Foreign Medical Graduates, specialty boards (e.g., American Board of Surgery, American Board of Internal Medicine), as well as rating and evaluation services, play an important role in providing critical information to health care consumers.

In Canada, the provinces have control over medical licensing. Several provinces grant licenses to experienced immigrant physicians who have completed postgraduate training in any of 29 approved foreign jurisdictions. Instead of having to repeat that training, they are simply required to pass a “practice readiness assessment,” a relatively short process (usually a few months) involving supervision by a licensed practitioner who must clear them as competent. In Nova Scotia, for example, nonspecialty general medical practitioners from other countries may practice under the supervision of a licensed physician and, after a designated period, may then independently practice in underserved areas. A similar program exists for specialists who receive their postgraduate training in countries other than the 29 approved jurisdictions.

To address the COVID-19 public health emergency, several U.S. states granted reciprocity to health care practitioners licensed in other states. But again, there’s no reason to limit this reform to emergency situations. Those states—and any others retaining in‐​state licensing requirements—should grant reciprocity to health care practitioners licensed in certain other countries with reputations for quality medical education and develop programs to facilitate integrating practitioners from less advanced countries into the pool of health care providers. Private certification organizations could be enlisted to assist in establishing criteria.

Replacing Licenses with Certification

When governors suspended state licensing laws to address the COVID-19 pandemic, they tacitly recognized that these laws erect barriers to the free flow of professional health care services and contribute to shortages of various types of health care services.

From its inception in 1847, the American Medical Association (AMA) sought to reduce the number of practicing physicians by promoting state licensing laws. It was largely unsuccessful in its campaign until after the Civil War. Then state chapters of the AMA persuaded legislatures to enact licensure boards, claiming that they would protect the public from gross incompetence. Unfortunately, as many victims of medical malpractice will attest, a license offers no guarantee of protection. Any level of protection that a license provides is largely duplicative of other quality‐​assurance mechanisms and more than offset by the quality‐​assurance mechanisms it blocks.

Having a license does not ensure quality care. Private credentialing and certification organizations, such as the American Board of Surgery and the American Board of Internal Medicine, provide examples of the sort of vetting of practitioners’ training and competency that health care consumers need when seeking medical advice. Insurance plans and health care facilities also carefully screen providers before adding them to their panels. Health care consumer‐​rating sites such as Healthgrades and Vitals rate health care providers, while sites such as Leapfrog and Consumer Reports rate health care facilities. Licensing boards only confirm that practitioners meet basic requirements and do not provide the more detailed information that consumers often require.

Licensing doesn’t protect in the ways many people assume it does. Once doctors have licenses, they may practice any specialty they choose. Many hospitals or insurance companies, on the other hand, may require their panels of providers to be specialty‐​board certified. For example, a physician with no formal training or certification in psychiatry can post “psychiatrist” on her office door but would not be able to practice psychiatry in a hospital. Credentialing protects people by carefully examining and verifying physicians’ depth of training and experience in the areas in which they claim to have expertise.

Certifying entities and credentialing by health care organizations provide a more accurate assessment of training and competence. It is important for certifying entities to be open to competition. Several of the medical specialties, including plastic surgery, spine surgery, pain management, and sleep medicine, have more than one organization from which to seek certification of training and competence.

Most certification organizations are private. They compete based on the quality of their credentialing. There are also organizations that certify the certifiers. Practitioners compete based on the reputation of their certifications as well.

States should replace licensure with third‐​party certification. One idea calls for a dual‐​track license/​certification scheme. In this proposal, private certifying organizations would register with the state. A health care practitioner certified by a registered organization would be able to practice as a “certified” practitioner alongside licensed practitioners. This dual‐​track model could also be used to gradually transition to a regulatory scheme based entirely on certification.

A move toward certification as an alternative to licensure would allow more individuals to enter the pool of health care providers based on skill and experience. Nurse practitioners and physician assistants, for example, would be able to offer more services to patients by demonstrating proficiency to certification organizations. This would increase patients’ access as well as choice.

Artificial shortages develop wherever there are barriers to entry for new providers. Clinician licensing laws artificially reduce the availability of health care practitioners and the availability of care. Replacing licensing with certification would help rectify the situation.

Conclusion

The COVID-19 pandemic made state and federal lawmakers acutely aware of how state‐​based regulation of clinicians contributes to the overall shortage of health care providers and obstructs their rapid response to public health emergencies. Governors tacitly acknowledged this when they issued executive actions suspending most of these regulations. Policymakers should learn from this. They must not return the regulatory regime to the status quo ante when this public health emergency is over, only to again be unprepared to deal with the next one. Steps should be taken on the federal level to remove barriers to the free flow of interstate health care services. States should reform health care practitioner licensing laws to enable providers to move more quickly to areas in need and to provide more choice and access to patients.

Jeffrey A. Singer

Jeffrey A. Singer, MD, practices general surgery in Phoenix and is a senior fellow at the Cato Institute.