Occupational Regulation

Occupational regulation refers to the licensing or credentialing of individuals seeking to work in medicine or healthcare. This type of regulation typically requires individuals to go through a professional training regimen of a particular type or duration, pass mandatory examinations, or meet some other set of predefined qualification standards. The actual content of these requirements can range from modest and reasonable—things that any rising professional would have done to gain credibility in the market—to unnecessarily burdensome or even counterproductive.

Historically, the argument for occupational regulation—especially in medicine—has been that it protects the public from harm caused by “incompetents, charlatans, and quacks.” While that goal may be accomplished on some level, some have argued that a much more significant effect has been to restrict entry to regulated professions and protect those already practicing against competition from newcomers. Wherever entry into an occupation can be slowed or the scope of practice for a profession limited, interest groups take notice and seek control over the requirements-setting process. For interest groups that succeed, it is a small step from serving as industry doorkeepers to exhibiting cartel-like behavior.

Medical licensure per se is not an area in which there is state variation, because all states require doctors to be licensed in order to practice medicine. Other aspects of medical licensure, however, such as state reciprocity and continuing education requirements, do vary at the state level. Similarly, there is variation in how other healthcare professionals are regulated. The HOAP index’s Occupational Regulation Subindex evaluates states in five areas: (1) medical licensure reciprocity with other states, (2) continuing medical education requirements for licensed medical professionals, (3) scope of practice for nurse practitioners, (4) licensing requirements for opticians, and (5) legality of direct-entry midwifery.

The first indicator evaluates the extent to which states make it easy for physicians to practice by recognizing medical licenses granted by other states. Reciprocity laws are one of the easiest and least controversial ways for states to minimize restraints on physicians, yet a substantial number of states do not allow reciprocity. Not only does this pose a problem for traveling physicians and physicians who practice near state borders, but it also has an unnecessarily restrictive effect on telemedicine (the practice of medicine at a distance through the use of telecommunications technology).

The second indicator scores states according to the number of hours of ongoing education required per year in order to maintain a medical license. Continuing medical education (CME) is promoted as a means to ensure that physicians stay current with changing medical knowledge, but there is some evidence challenging whether it is effective and used properly. State-mandated CME requirements are in essence an extension of medical licensure and are thus detrimental to openness, access, and choice in the same ways medical licensure is. Admirably, a small number of states recognize this and do not require any CME hours. A much larger number of states do require CME, however. For this indicator, states that require fewer CME hours received higher scores.

The third indicator expresses the breadth of actions and procedures that states allow nurse practitioners (NPs) to perform under their professional license. Growing evidence indicates that NPs can perform many primary care services as safely and effectively as physicians perform them, yet some states either limit what NPs are allowed to do or require that they practice under the direct supervision of a physician. States that allow healthcare organizations to determine for themselves which procedures NPs may perform scored higher for this indicator.

The fourth indicator evaluates the licensing barriers that states erect for individuals who seek to work as opticians, fitting and dispensing corrective lenses for people with vision problems. Some states allow freedom of entry into this profession by not requiring a minimum amount of experience or education, leaving the judgment of individual opticians’ competence up to the market. Those states score highest for this indicator. Other states require either a moderate amount of experience or education (less than two years) or a significant amount (two or more years) before an individual may practice as an optician.

The fifth and final indicator in this subindex evaluates whether states allow self-study or apprenticed midwives to offer childbirth assistance. Although midwife-attended births are standard for women with low-risk pregnancies in most other developed nations, the practice is relatively uncommon in the United States. Unfortunately, skepticism about the practice has become ensconced in state law. Some states allow direct-entry midwifery, but several states and the District of Columbia continue to restrict or prohibit midwifery to varying degrees, denying midwives the ability to practice their profession and denying women the autonomy to make an informed choice about their birthing options. States that allow direct-entry midwifery score higher for this indicator than those that do not.