Instead of vetting physicians, the licensing apparatus provides an avenue for professional influence that has been used to restrict entry, limit competition, and preclude innovation in the provision of health care. Only in states like Alaska, where physicians’ care is difficult to access in rural areas, have professional interests to limit competition been set aside to experiment with new structures of care. The good news is that, freed from the restrictive scope of practice rules, innovation can lower costs and improve access with no apparent effect on quality. It is a win-win situation for all but physicians seeking to protect their traditional turf.
The similarities between the actions of state licensing boards and a cartel are striking. Government regulations facilitate the type of entry restrictions a private cartel would have difficulty enforcing. By dictating the required level and type of training, state regulations benefit the licensed profession at the expense of consumers. The regulatory apparatus also allows politically powerful physician groups to limit the scope of practice of non-physician clinicians.