The Other Information Asymmetry

The Other Information Asymmetry

One of the most popular justifications for occupational licensing is the existence of an information asymmetry between consumers and practitioners. As the information asymmetry (and the possibility of abuse) increases, the justification for licensing becomes stronger: The consequences of picking a quack doctor or lawyer are dramatically greater than those of picking a bad barber.

But there is a separate–and I would argue far more pernicious–information asymmetry that exists in the licensing debate. This information asymmetry deals with the crafting of policy rather than the provision of services.

The American Medical Association or other physicians’ organizations are prime examples of this. Regularly, they will publish something on their website talking about how expanding scope of practice or other reforms like eliminating physician supervision requirements for nurse practitioners or physician assistants will reduce quality of care and patient safety for vague reasons. 

More often, they’ll shift the goalposts by saying that the benefits of non-MDs taking a more prominent, independent role in the healthcare labor market are nonexistent or small (as opposed to saying the downsides are high). Another sneaky rhetorical trick is to say that patients prefer physician-led teams or going to an MD, a preference which is without a doubt exists at least in part due to their propagandizing.

This story from Yascha Mounk last year in The Atlantic describes this dynamic quite well:

As Barbara Horn, O.D., the president of the American Optometric Association (AOA), told me, “Today, at least 2.2 billion people around the world have a vision impairment, of whom at least 1 billion have a vision impairment that could have been prevented or has yet to be addressed … That’s why it’s clear to health experts, policymakers, the media, and the public that increased access to eye exams and eye doctors are needed to safeguard health and vision.”  [Emphasis added].

This is the canned question-begging response that allows members of professions with either licensing requirements or regressive regulations of the gatekeeping variety to muddy the waters. “Trust me, I’m the president of the doctor’s professional association” goes a long way. 

Later in the piece, Mounk describes a visit to his optometrist where he was almost strong-armed into buying a more expensive pair of glasses:

When I last went to an eye exam at a storefront optician in the United States, for example, the staff gave me the hard sell on glasses that would have cost hundreds of dollars, as well as on contact lenses that were much more expensive than identical ones sold by online retailers. Thankfully, I knew that two laws, one passed in 1997 and the other in 2003—which had, incidentally, been loudly opposed by the AOA—gave me the right to demand a copy of my prescription. I stood firm, and later went online to order perfectly fine glasses and contact lenses at a fraction of the price. But how many customers give in to heavy-handed sales tactics?

This second passage is interesting for two reasons. First, it describes the exact dynamic that licensing requirements and similar barriers to entry are supposed to prevent. Had Mounk not known his legal rights, he would have been ripped off. And, to my knowledge, his vision is working fine.

But here’s the second reason it’s interesting. When you compare it to the first quotation I cited and remove the particulars of the scenarios (the former being a discussion of policy while the latter is a personal interaction), they’re essentially the same thing. Someone who presents themselves as knowing more is asserting that a certain economic arrangement is better for those who don’t know any better.

Now, the above discussion comes with a caveat: When crafting policies, all stakeholders should have some seat at the table, and practitioners are no exception. They have intimate knowledge of the facts on the ground, without which good policy can’t be crafted.

But here’s the downside risk: Expertise can elevate these groups and their representatives to a priestly class with the ability to pull the wool over the eyes of reformers in just the same way the regulations they support are supposed to prevent from happening to patients.

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By |2020-09-29T12:28:15-07:00September 29th, 2020|Blog, Occupational Licensing|