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Physician Licensure Legislation and the Quality of Medical Care
Abstract and Figures
To summarize, the empirical tests used in this study have found no support for the contention that physicians were initially regulated at the behest of the general population. Rather, empirical support was found for the theory that licensing legislation was the result of organized physicians employing the political system for limiting entry and the concomitant increaseing of returns to incumbent medical practitioners. Additionally, this study found no support for the contention that state licensing of physicians was associated with higher levels of health care quality as measured by mortality rates among various population age groups.
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... Many studies find little evidence of the purported benefits. Such conclusions come from research on a diversity of occupations, such as school teachers (Angrist & Guryan, 2008;Buddin & Zamarro, 2008;Kleiner & Petree, 1988), interior designers (Carpenter, 2008), construction trades (Skarbek, 2008), mortgage brokers (Kleiner & Todd, 2007), dentists (Kleiner & Kudrle, 2000), physicians (Paul, 1984), and others (Carroll & Gaston, 1981). ...
... Such results add further support to earlier studies that find little evidence of purported benefits from licensing (Angrist & Guryan, 2008;Buddin & Zamarro, 2008;Carpenter, 2008;Carroll & Gaston, 1981;Kleiner & Kudrle, 2000;Kleiner & Petree, 1988;Kleiner & Todd, 2007;Paul, 1984;Skarbek, 2008). Given recent estimates that licenses increase wages as much as 15% (Kleiner & Krueger, 2010), which are typically borne by consumers in higher costs, this body of research calls into question whether society truly benefits from licenses in light of real costs. ...
This study examines hypothesized benefits associated with occupational licensing in one long-regulated industry in Louisiana—floristry—in order to determine to what extent licensing results in theorized benefits that might justify the costs associated with licensure systems. Results indicate the regulation appears not to result in a statistically significant difference in quality of product. Moreover, florist-judges, whether licensed or not, appeared consistent in how they rated 50 floral arrangements from randomly chosen floral retailers.
... As Gaumer argues, the primary purpose of certification and licensing requirements is to restrict competition rather than maintain an acceptable level of care quality (Gaumer, 1984). Further, Paul rejects the idea that physician regulation is driven by the public's demand for minimum quality standards, instead finding evidence in support of the "capture theory of regulation," posited by Stigler and Peltzman, where physicians request the initial regulation to prevent future entry, leading to higher salaries for those already in the profession (Paul, 1984;Stigler, 1971;Peltzman, 1976). ...
Advance Practice Nurses (APNs) provide high quality care and achieve high patient satisfaction while requiring a shorter and less costly training period than physicians. APNs are restricted by legal requirements, known as scope of practice (SOP) laws, for physician oversight due to concerns about patient safety and quality of care due to the shorter training (Iglehart, 2013). We investigate whether the existence of, and changes in, expanded scope of practice laws alter health care outcomes across states using a fixed effects model for the 50 states and the District of Columbia between 2005 and 2015. Additional fixed effects models are estimated with interactions and lags as robustness checks. Our results suggest that health outcomes in states with expanded scope of practice laws are largely no different from those states with restrictions on nurse practitioner practice and prescription authority.
... Some argue that regulation in developing countries either reflects the governments' unrealistic expectations of what is achievable, or the desires of professional bodies (Blevins, 1995;Ensor & Weinzierl, 2007). Some evidence, for instance, suggests that while regulation plays a role in protecting the public, certain aspects appear to serve the objectives of professionals and limit competition (Blevins, 1995;Graddy, 1991;Paul, 1984). ...
The problem of poor regulatory compliance has been widely reported across private health providers in developing countries. Less known are the underlying reasons for poor compliance, especially with regards to the roles played by front-line regulatory staff, and the regulatory institution as a whole. We designed a qualitative study to address this gap, with the study questions and tools drawing on a conceptual framework informed by theoretical literature on regulation. Data were collected from specialized drug shops (SDSs) in two rural districts in Western Kenya in 2011 through eight focus group discussions, and from regulatory staff from organizations governing the pharmaceutical sector through a total of 24 in-depth interviews.
... Noether (1986) interprets evidence of increased competition in medical markets in the United States since 1965 as suggestive of declining professional influence over physician licensure. Paul (1984) examines the effect of state medical society lobbies on the onset of licensure. He finds a positive relationship between AMA membership and the early onset of licensing. ...
Licensing describes the set of regulations that limit service provision to individuals or entities who meet state-established criteria. Despite claims that licensure increases service quality, the effect of licensure on consumption quality is ambiguous. That fact that service providers actively promote licensing has led to the suspicion that licensing benefits these groups at the expense of providers of competing services or consumers. Also at issue is whether information asymmetries or agency costs are strong enough to warrant government intervention. Many believe that, in the absence of government intervention, markets would generate sufficient information through reputation and other mechanisms to meet the needs of consumers.
... Economists recognize that licensing restricts the number of new entrants into an occupation, resulting in an increase in the price of labor and services rendered (Shepard 1978;Rottenberg 1980;Haas-Wilson 1986;Cox & Foster 1990;Kleiner & Kudrle 2000). Industry insiders recognize this and pursue licensing to realize greater economic benefits (Pfeffer 1974;Paul 1984;Wheelan 2005;Kleiner 2006), while ''signaling'' to consumers and policymakers the assurance of quality and safety associated with licensure (Spence 1973). ...
This case study examines a form of occupational regulation infrequently examined in academic literature – titling laws. These laws regulate who may legally use a phrase, or title, to describe their work to the public. Focusing on the interior design industry, this article demonstrates how industry leaders use titling laws as the first step in a push for full occupational licensure. In so doing, they allege a need for regulation out of concern for public health and safety, but as data in this case study indicate, there appears to be no threat to public health and safety from unregulated interior designers. Instead, designers advocate for increased regulation of their own industry, through the evolution of titling laws to full licensure, due to the benefits it affords them.
... There are two families of theories to explain the existence and specific patterns of legislation, including health worker licensure (T. G. Moore, 1961; Noether, 1986; Paul, 1984; Posner, 1974). According to " public interest " theories policy makers supply regulation in response to the demand of the public for the correction of a market failure. ...
Past research on the health workforce can be structured into three perspectives – “health workforce planning” (1960 through 1970s); “the health worker as economic actor” (1980s through 1990s); and “the health worker as necessary resource” (1990s through 2000s). During the first phase, shortages of health workers in developed countries triggered the development of four approaches to project future health worker requirements. We discuss each approach and show that modified versions are experiencing a resurgence in current studies estimating health worker requirements to meet population health goals, such as the United Nations’ health-related Millennium Development Goals. A perceived “cost explosion” in many health systems shifted the focus to the study of the effect of health workers’ behavior on health system efficiency during the second phase. We review the literature on one example topic: health worker licensure. In the last phase, regional health worker shortages in developing countries and local shortages in developed countries led to research on international health worker migration and programs to increase the supply of health workers in underserved areas. Based on our review of existing studies, we suggest areas for future research on the health workforce, including the transfer of existing approaches from developed to developing countries.
This study examines the scope and burden of occupational licensing laws in the United States for 102 low- and moderate-income occupations. Findings indicate that the licences studied require of aspiring workers, on average, $US209 in fees, one exam, and about nine months of education and training, plus minimum grade and age levels. Data also indicate striking disparities in requirements within and between occupations and within and between states. These inconsistencies likely reflect not the relative public health and safety risks of occupations, but instead the lobbying prowess of practitioners in securing laws to shut out competition.
According to the Council of State Governments (CLEAR 2004), more than 800 occupations are subject to licensing requirements in at least one state. It is, therefore, not surprising that a 2006 Gallup survey found that 29 percent of the workforce was required to hold a license from a government agency (Kleiner and Krueger 2008). Licensing affects a much larger percentage of workers than either the minimum wage or unionization. In 2003, less than 3 percent of hourly workers were paid the minimum wage (Kaufman and Hotchkiss, 2006, 283). for unionization, we reproduce Figure 1 from Kleiner and Krueger (2008); licensing affects about two and a half times more workers than unionization. Licensing is one of the most important forms of labor regulation, yet textbooks in labor economics give it scant attention. We identified five undergraduate labor economics textbooks currently in print, listed in Table 1. All but one have been published in four or more editions.
The period 1880–1910 saw great improvement in the health of city dwellers. Life expectancy at birth for males in Boston rose from 37 in 1880 to 46 in 1910; in New York City it rose from 29 in 1880 to 45 in 1910. The improvement in the state of health came largely from a decline in the incidence of infectious disease. Recent studies have suggested that most of this decline is fairly attributable to improvements in the standard of living—especially as reflected in diets and housing—and, for cities, to new public health measures—especially the installation of sanitary sewers and the provision of central supplies of pure drinking water. Government installation of public health projects in the United States was a part of the “sanitation movement,” which began some time around 1880. During the thirty-year period 1880–1910 there was a rapid increase in the fraction of the urban population served by sanitary sewers and improved water systems. For example, in 1875 fewer than 30,000 urban citizens were supplied with filtered water. By 1910 the figure had risen to over 10,000,000. That the improved health resulting from these public health measures must have been regarded by its recipients as an increase in their well being is clear. What is not clear is whether the recipients of improved health would have been even better off if the resources used in constructing and maintaining public health projects had been put to alternative uses unrelated to health. In this article I shall estimate the social rates of return on the cumulated investments in public health projects as could have been perceived by their builders and show that it may have exceeded the market rate of return on capital by several times.
The role of law in relation to social change is not well understood. One reason for our ignorance is the lack of evidence on the causal role of legislation. Too often the efforts at social reform and the intended consequences of legislation are accepted as proof that behavior has been significantly altered. A case in point is legislation that compels children to attend school. Although it is commonly believed that such laws have been effective in increasing the participation of children in schooling systems in the United States over the last 100 years, there is little evidence to support or reject this belief. Some persons have questioned whether these laws have been the cause or the result of observed increases in school attainment. Still others have doubted the degree to which compulsory schooling laws have been enforced. Reports of widespread truancy in urban schools today call into question not only present enforcement difficulties but also whether these laws were effectively enforced from their inception in the nineteenth century. Yet, in spite of the contemporary and historical interest in compulsory school attendance laws, the basic question remains unanswered: what has been the effect, if any, of these laws on school enrollment and attendance?