NCPA - National Center for Policy Analysis


October 9, 2008

In the United States, the authority to regulate medical professionals lies with the states, and to practice within a state, clinicians must obtain a license from that state's government.  However, licensure fails to protect consumers from incompetent physicians and raises barriers to entry making health care more expensive and less accessible, says the CATO Institute.

States first began licensing physicians in the early part of the 20th century, and in effect, they handed the administration of physician-licensing laws to state boards composed of physicians.  Likewise, states vested oversight of medical school accreditation in the American Medical Association, which represents the interests of physicians.  Yet, many observers have suggested that licensing laws give physicians too much power, says CATO:

  • Leading economists have argued that state licensing laws unnecessarily restrict the supply of medical care, because they require physicians to perform tasks that could be performed ably and less expensively by less-skilled professionals.
  • Institutional oversight and a sophisticated network of private accrediting and certification organizations, all motivated by the need to protect reputations and avoid legal liability, offer whatever consumer protections exist today.
  • Consumers would benefit were states to eliminate professional licensing in medicine and leave education, credentialing and scope-of-practice decisions entirely to the private sector and the courts.

Moreover, if eliminating licensing is politically infeasible, some preliminary steps might be generally acceptable.  States could increase workforce mobility by recognizing licenses issued by other states.  For mid-level clinicians, eliminating education requirements beyond an initial degree would allow employers and consumers to select the appropriate level of expertise.

At the very least, state legislators should be alert to the self-interest of medical professional organizations that may lie behind the licensing proposals brought to the legislature for approval, says CATO.

Source: Shirley Svorny, "Medical Licensing: An Obstacle to Affordable, Quality Care," CATO Institute, Policy Analysis, No. 621, September 17, 2008.

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