Is Medical Licensing Really Necessary?

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Licensing Doctors – Do Economists Agree?

[By Staff Reporters]

In the US, the various state medical boards dictate the rules for physician licensure and discipline. Would-be physicians must complete an approved medical training program and pass a standardized test.

Scope-of-practice laws prohibit other health professionals from offering similar services.


Google School of Medicine

[Google School of Medicine]


Given the resources involved in licensing doctors, taxpayers might be surprised to learn that the link between licensing and service quality is tenuous at best.

In fact, some economists like Shirley Svorny PhD, who’ve examined the market for physician services, may view medical licensing as a constraint on the efficient combination of inputs and a drag on innovations in health care and medical education.




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8 Responses

  1. Free Medical School?

    One of the most compelling medical stories in the country is unfolding within the sprawling landscape of inland Southern California.

    The story centers on the University of California, Riverside School of Medicine where G. Richard Olds MD, the school’s dean, is taking on one of the uber challenges in health care today: How to get doctors into areas significantly underserved by health care professionals.

    Dr. Reliefe


  2. Dentist Say Ouch!

    According to Mary Otto, on February 25th 2015, the US Supreme Court ruled that the North Carolina state dental board did not have the authority to regulate the teeth-whitening businesses.

    In a 6-3 decision, the justices found the North Carolina Board of Dental Examiners, which is comprised mostly of dentists, illegally quashed competition from non-dentists who sought to open teeth-whitening shops in the state.

    The decision, which upheld a lower court’s ruling, has the potential to impact other professional licensing boards, across the country.

    And, economists who have examined the market for physician services in the United States generally view state licensing as a means by which to enforce cartel-like restrictions on entry that benefit physicians at the expense of consumers. Medical licensing is seen as a constraint on the efficient combination of inputs, a drag on innovations in health care and medical education, and a significant barrier to effective, cost efficient health care.

    Hope R. Hetico RN MHA


  3. On Medical Boards

    “I am persuaded that licensure has reduced both the quantity and quality of medical practice…It has reduced the opportunities for people to become physicians, it has forced the public to pay more for less satisfactory service, and it has retarded technological development … I conclude that licensure should be eliminated as a requirement for the practice of medicine.”

    Milton Friedman
    [Nobel prize-winning economist]

    REFERENCE: Friedman, M., “Medical Licensure” in the Dangers of Socialized Medicine, ed. by Hornberger and Ebeling, Future of Freedom Foundation, Fairfax, Va. 1994, p.68.

    Eric A. Dover MD


  4. On Medical Boards

    According to Michel Accad MD, Richard Harrison Shryock was a leading American medical historian of the twentieth century. He wrote Medical Licensing in America, 1650-1965, which seems to be the definitive book on the history of medical licensing in this country. Shryock is very partial to licensing, but the book is still an excellent historical resource.

    As a counterpoint, we cannot recommend enough the paper by historian Ronald Hamowy entitled “The Early Development of Medical Licensing Laws in the United States, 1875-1900.”

    Hamowy chronicles the efforts of the American Medical Association to reinstate licensing laws and portrays those efforts in a very different light.

    Dr. David E. Marcinko MBA


  5. Licensing Regulations

    Indeed, some do argue that increased government regulation, including varying licensing requirements that prevent workers from setting up shop in another state, have made the labor market more static, though the evidence is mixed.



  6. End mandatory physician licensure

    This one is Milton Friedmanʼs idea: anything that constrains the supply of providers increases the cost of health care, so government-mandated physician licensure is an unnecessary interference in the market. The AMA and other professional societies could offer certification on a voluntary basis, though I pay little attention to diplomas or board certification anymore: I look at whether the physician is in-network, and their reviews on Angieʼs List. Where is the value-added from a government license? The market would decide which certification processes work and which do not — not the government.

    Duncan Cross
    via Ann Miller


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