Reinhardt on Doctors' Monopoly
By David Henderson
Organized medicine invariably opposes wider scopes of practice and independent practice of nonphysician health professionals, ostensibly not to protect economic turf but to protect the quality of patient care. Curiously, one rarely finds those to be protected by this paternalism vocally on organized medicine’s side.
Not many economists today are buying the medical profession’s position on this issue. More typically, economists lean toward [Milton] Friedman’s more cynical view. They regard professional licensure of any kind – almost always proposed by the very professionals or occupations to be licensed – mainly as a means to endow the licensees with monopolistic market power.
This is from an excellent New York Times blog post by Princeton University health economist Uwe Reinhardt. It’s titled “The Dubious Case for Professional Licensing.”
Reinhardt quotes extensively from one of the most impressive chapters in Milton Friedman’s classic 1962 book, Capitalism and Freedom. I still remember reading that chapter when I was 17 or 18 and being blown away by Friedman’s reasoning on an issue I had never thought about but found myself totally persuaded about. Reinhardt is persuaded also. After quoting Friedman, he writes:
Friedman has fewer objections to certification, which practically means that no one without the education and training of a physician could call himself or herself an M.D.; but he would let patients, not physicians, decide from whom patients can seek medical treatments. I share that view.
Reinhardt writes his post in the context of current debates about how much latitude to give nurse practitioners. He, like many other health economists including me, advocates wide latitude. The case is especially strong given the high percent of doctors who will not take Medicaid patients. Reinhardt writes:
On its surface, this concern for the quality of medical care received by Americans seems convincing. Yet a recent paper by Sandra Decker in Health Affairs reports that a third of primary-care physicians (general and family medicine, internal medicine or pediatrics) in the United States do not accept Medicaid patients, presumably because the fees Medicaid pays are considered too low. In California, the percentage of primary care physicians refusing to accept new Medicaid patients falls in the range of 44 to 54 percent.
An economist can understand that physicians refuse to treat Medicaid patients at low fees when the opportunity cost of doing so is treating patients at higher fees. But what is to be done for the patients whom close to 50 percent of California primary care physicians refuse to treat?
What if independently practicing nurse practitioners were willing to see Medicaid patients at Medicaid’s fees for the range of primary care services for which nurse practitioners are educated and trained? Would the California Medical Association contend that for patients whom physicians refuse to serve, the next best option is no care at all? Or that properly educated and trained nurse practitioners could render such care, as is done in 17 other states (see, for example, evidence from New York).
Well done, Uwe! BTW, those who don’t follow the health economics blogs might not know that Uwe, a strong advocate of heavy government intervention in health insurance and health care, often tangles as a commenter on John Goodman’s health policy blog. But this is something all three of us agree on.
HT to Ross Levatter.