NCPA - National Center for Policy Analysis

Occupational Licensing and Health Spending

August 31, 2015

Health care professionals are currently required to obtain a license from both state and national medical boards. State licenses however, are only granted after physicians meet certification requirements by national boards in a specialty area, for example the American Board of Neurological Surgery. Although individual states govern licensing, reducing the burden of licensing at a federal level could reduce spending on Medicare and offer lower prices and more choices to patients, writes John R. Graham, senior fellow at the National Center for Policy Analysis.

In July, a report from the Obama administration containing expert analysis from the Department of the Treasury, the Council of Economic Advisers and the Department of Labor concluded "There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across State lines."

Since 2000, the Convenient Care Association established 1,900 convenient walk-in clinics in 43 states.

  • Walk-in clinics are staffed by nurse practitioners who can administer immunizations, preventive screenings and have some authority to grant prescriptions for colds, the flu, skin irritations, and muscle strains or sprains.
  • In seven states laws restrict nurse practitioners, mandating a physician\'s oversight and limiting each physician to only four nurses, increasing medical costs.

Possible solutions to the current licensing restrictions include "site-neutral" payments, and offering small monetary rewards to Medicare beneficiaries for using a convenient clinic.  A flu vaccination should cost the same amount whether administered by a doctor or a nurse practitioner. The federal government agreed roughly 10 years go to reimburse convenient clinics at 85 percent the cost of a doctor\'s visit.  By incentivizing convenient clinics for Medicare beneficiaries, the overall Medicare tax burden could be reduced.  States who impose restrictions curtailing convenient clinics from serving Medicare beneficiaries through licensing restrictions increase the price taxpayers pay for Medicare.

Source:  John R. Graham, "Occupational Licensing and Health Spending." The Hill, August 21, 2015.

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