Medical Licensing: An Obstacle to Affordable, Quality Care

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In the United States, the authority to regulatemedical professionals lies with the states. To practicewithin a state, clinicians must obtain a licensefrom that state’s government. State statutes dictatestandards for licensing and disciplining medicalprofessionals. They also list tasks clinicians areallowed to perform. One view is that state licensingof medical professionals assures quality.

In contrast, I argue here that licensure notonly fails to protect consumers from incompetentphysicians, but, by raising barriers to entry,makes health care more expensive and less accessible.Institutional oversight and a sophisticatednetwork of private accrediting and certificationorganizations, all motivated by the need to protectreputations and avoid legal liability, offerwhatever consumer protections exist today.

Consumers would benefit were states to eliminateprofessional licensing in medicine and leaveeducation, credentialing, and scope‐​of‐​practicedecisions entirely to the private sector and thecourts.

If eliminating licensing is politically infeasible,some preliminary steps might be generally acceptable.States could increase workforce mobility byrecognizing licenses issued by other states. Formid‐​level clinicians, eliminating education requirementsbeyond an initial degree would allowemployers and consumers to select the appropriatelevel of expertise. At the very least, state legislatorsshould be alert to the self‐​interest of medicalprofessional organizations that may lie behind thelicensing proposals brought to the legislature forapproval.

Shirley Svorny

Shirley Svorny is professor of economics and chair of the Department of Economics at California State University, Northridge, and an adjunct scholar at the Cato Institute.