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Better Health Care Through Less Government

Daniel RoncariCascade Commentary

Summary

Many of the problems present in Oregon’s health care system associated with access and affordability would be alleviated by increasing the number of medical procedures that do not require a fully licensed physician and by allowing doctors licensed in another state to practice in Oregon.

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The two most commonly cited problems in America’s health care system are access and high costs. Although some would argue that more government intervention is necessary to address these problems, America’s health care industry is already regulated to such a large extent that, according to Healthy Competition, a book on health care published by The Cato Institute, “[h]ealth care may be the most intensively regulated sector of the U.S. economy.” The best policy to resolve these problems, in fact, is less government control of this industry.

The following two policy recommendations will improve Oregonians’ access to health care and help lower its cost without reducing the quality of that care: 1) increase the number of medical procedures that can be performed without a doctor or without doctor supervision; and 2) allow physicians fully licensed and in good standing in another state to practice medicine in Oregon. These two proposals have the effect of reducing the state licensing board’s monopoly over who can practice medicine within its boarders, thereby increasing competition.

“Milton Friedman points out that ‘[…] many things are restricted to licensed physicians that could perfectly well be done by technicians, and other skilled people who do not have a Cadillac medical training.’”

Mandatory licensing of physicians provides a clear example of how government control of the health care industry creates difficulties in terms of access and affordability. The licensing of physicians increases the cost of health care by artificially lowering supply. Because one is generally prohibited from practicing medicine unless one is granted state privilege to do so, licenses have the effect of creating a state-enforced cartel of doctors. Since the supply is restricted, doctors can charge a higher price than if the industry were open to more competition.

The fact that one needs a license to practice medicine means that each physician must have gone through a standard licensing procedure. Additionally, many medical practices are restricted to doctors who have completed this lengthy training. Milton Friedman points out that “[u]nder the interpretation of the statutes forbidding unauthorized practice of medicine, many things are restricted to licensed physicians that could perfectly well be done by technicians, and other skilled people who do not have a Cadillac medical training.” An example of this is the fact that some medical practices now performed by nurses and physician assistants under mandatory doctor supervision could be done independently by nurses or physicians. Overall, licenses create this “all or nothing” range of provided medical services that increases the cost of health care.

A physician must be licensed by Oregon’s medical licensing board in order to practice medicine in Oregon, even if licensed in another state. This policy has the effect of reducing the number of medical options available to Oregonians. The regulatory requirements make it a difficult process for doctors licensed in another state to obtain an Oregon medical license and thus compete with locally licensed doctors to offer lower prices and better access to Oregonians.

Since the biology of people does not change from state to state, a doctor licensed in another state should be qualified to perform medical practices in Oregon.”

Since the biology of people does not change from state to state, a doctor licensed in another state should be qualified to perform medical practices in Oregon. It might be objected that another state may have a more lenient licensing process. However, suppose you were vacationing in another state. Would you hesitate to seek medical help for fear of lower licensing standards? Many Americans would not have any issue with seeking medical help from a doctor licensed in another state than their own. By increasing the pool of physicians available to Oregonians, and thereby increasing competition, access would be improved and costs lowered.

Many of the problems present in Oregon’s health care system associated with access and affordability would be alleviated by increasing the number of medical procedures that do not require a fully licensed physician and by allowing doctors licensed in another state to practice in Oregon. These policies would increase the supply of medical practitioners available to Oregonians and lower the cost of health care. As is the case with problems found in many other industries, it is the free market, not more government involvement, which provides the best solutions.

Daniel Roncari is a research associate at Cascade Policy Institute, Oregon’s premier free market public policy think tank. To read other publications on health care policy, visit www.cascadepolicy.org.

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Cascade Policy Institute is a tax-exempt educational organization as defined under IRS code 501(c)(3). Nothing appearing in this Cascade Commentary is to be construed as necessarily representing the views of Cascade or its donors, or as an attempt to aid or hinder the passage of any bill before any legislative body. The views expressed herein are the author’s own.

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