Let’s scrap regulations on medical workers for good

During a pandemic, the worst thing the government can do is restrict the supply of health care workers and medical equipment. That’s why, in gearing up to respond to COVID-19, nearly every state in the union hurriedly struck down licensing burdens.

Michigan has some of the most restrictive scope-of-practice and occupational licensing rules for nurses, preventing them from writing prescriptions or operating outside the direct oversight of a doctor. And hospitals and medical centers need special permission from a state Certificate of Need board if they want to build facilities, expand the number of hospital beds, or use new cancer treatments.

But the novel coronavirus changed things. Even the very regulatory-friendly Gov. Gretchen Whitmer unilaterally suspended these laws and regulations. 

She wasn’t alone. From Alaska to Wyoming, governors and lawmakers struck down health care regulations. These changes included:

• Suspending testing and certification requirements;
• Allowing out-of-state professionals to move in or cross the border to work;
• Skipping licensing exams;
• Permitting retired professionals to easily get back into the workforce;
• Expanding scope-of-practice rules;
• Allowing doctors to volunteer without meeting new requirements; and
• Striking down barriers to telemedicine.

It’s very likely that changing these hurdles to work saved lives. But it shouldn’t take a pandemic to get good reform. Most of these rules should be retired permanently.

The United States has more pervasive licensing requirements than most European countries. We require more occupations to go through strict regulatory procedures, and those requirements often are more stringent than elsewhere. In other words, our doctors, nurses, dentists, optometrists and other health care workers must do more hours of training and continuing education than those almost anywhere else.

If these regulations result in better care, they may be worth it. But sometimes they don’t. Research suggests that many state health care regulations mean there are fewer professionals to serve people — and higher prices, as well. For example:

“Looking at select occupations, Morris M. Kleiner estimates that states without licensing experienced 20 percent faster growth in the number of professionals than states that licensed those select occupations. Across a larger sample of professions, Kleiner found an 11.4 percent reduction in the number of professionals as a result of the barriers created by occupational licensing. These findings are evidence that licensing laws have reduced the supply of health care professionals as a result of elevated entry costs. The rigidity of licensing requirements makes it more difficult for new professionals to enter an occupation quickly in response to a sudden surge in demand.”

These findings may seem counterintuitive. How can allowing “less qualified” or “less educated” people work as medical professionals improve health outcomes?

It’s because the world of finding services is not a binary one. That is, it isn’t that a person either goes to the most-credentialed doctor or receives no care at all. People go to providers based on what they need to have done. The bulk of most doctor appointments are handled by nurses. Most dental visits are done by hygienists. Many check-ups and questions about a child’s fever can be handled via telemedicine.

But strict occupational licensing rules prevent those ways of delivering care. In some cases, they do so by making rules; at other times, they put in place such strict requirements that fewer people are able to perform those tasks. The effects are felt most strongly in rural areas with doctor shortages. In many states, nurse practitioners have stepped in to fill the void. But when a state makes it illegal for nurses to write prescriptions or treat patients without supervision, there are fewer practitioners, clinics and medical resources. In that case, patients do face a binary choice — they either will be able to see a health care professional, or they will miss out on medical resources altogether.

A pandemic gave us a case study in cutting regulations — and it is doubtful anyone noticed negative outcomes as a result. One lesson is that states should focus on enforcing the licensing rules that make sense and eliminate the rest. That would allow more workers and lower-cost health care, to the benefit of the public.

Jarrett Skorup is the director of marketing and communications at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Follow him on Twitter @JarrettSkorup.