Protectionism: of the white collar variety

Relaxing Occupational Licensing Requirements: Analyzing Wages and Prices for a Medical Service
by Morris M. Kleiner, Allison Marier, Kyoung Won Park, Coady Wing

Abstract:

Occupational licensing laws have been relaxed in a large number of U.S. states to give nurse practitioners the ability to perform more tasks without the supervision of medical doctors. We investigate how these regulations may affect wages, employment, costs, and quality of providing certain types of medical services. We find that when only physicians are allowed to prescribe controlled substances that this is associated with a reduction in nurse practitioner wages, and increases in physician wages suggesting some substitution among these occupations. Furthermore, our estimates show that prescription restrictions lead to a reduction in hours worked by nurse practitioners and are associated with increases in physician hours worked. Our analysis of insurance claims data shows that the more rigid regulations increase the price of a well-child medical exam by 3 to 16 %. However, our analysis finds no evidence that the changes in regulatory policy are reflected in outcomes such as infant mortality rates or malpractice premiums. Overall, our results suggest that these more restrictive state licensing practices are associated with changes in wages and employment patterns, and also increase the costs of routine medical care, but do not seem to influence health care quality.

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6 Responses to Protectionism: of the white collar variety

  1. desipis says:

    However, our analysis finds no evidence that the changes in regulatory policy are reflected in outcomes such as infant mortality rates or malpractice premiums.

    Those seem like some pretty poor proxies for measuring the impact of any increase in prescription errors.

    • Nicholas Gruen says:

      Fair point. One thing I’m surprised by is the assumption that going with nurses could only make things worse – which the authors investigate and then decide that it didn’t make things worse. My assumption would be that properly handled the change should improve things because one can train the nurses in the specific craft of understanding the confidence with which they can prescribe. One might for instance help nurses diagnose and prescribe with expert systems which work better than doctors in many circumstances but which require expert interpretation for more difficult cases.

  2. Patrick says:

    If labor had two brain cells to rub together that weren’t on a union junket in a brothel, they’d be all over this.

    But since licensing is in part a union game…

  3. paul walter says:

    The union he refers to is the AMA, of course.

    For my part, Desipis has beaten me to that obnoxious comment cited by same.
    Eventually standards drop and someone IS killed.

  4. Hildy says:

    Mind you, the Labor government in NSW hates doctors so much that it engaged in union-busting and the hiring of scabs in the 1980s.

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