Medical Licensing Laws Stand in the Way of Affordable Health Care

The provision of health care in the United States remains an ongoing policy challenge. The latest estimate from the U.S. Census is that 33 million Americans lack health insurance coverage. In addition, the cost of health care continues to rise at a faster rate than inflation, according to the consumer price index. Taking a serious look at occupational licensing laws may be a necessary step toward slowing down rising health care costs.

Occupational licensing laws are ubiquitous in the health care labor market. A recent report from the White House suggests that more than 80 percent of all health care practitioners are licensed. Occupational licensing laws require workers in a particular health care field to pass exams, complete minimum levels of schooling and pay fees before they're eligible to practice.

Whether these laws are necessary, or whether they can do more harm than good in some cases, is a legitimate question, especially when considering how difficult these laws can be to remove. A recent report that I wrote with Robert Thornton of Lehigh University for the Bureau of Labor Statistics documents that there were only eight cases in the United States during the last 40 years where licensing legislation was successfully eliminated.

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