Medical Licensing Regulations Shrink Efficient Health Care

Medical Licensing Regulations Shrink Efficient Health Care
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The United States faces a looming crisis in the provision of health care.

A number of sources have communicated dire warnings about upcoming shortages in the medical profession, and a 2015 Washington Post article cited data suggesting that 90,000 physicians would have to be added to the workforce by 2025 to meet the overwhelming demand for U.S. health care professionals.

Many wonder if the looming shortage of physicians can be fixed, and the answer is undoubtedly so, but how? Allowing and recruiting foreign-trained physicians from abroad would be a good start.

The problem with this, however, is that current regulations have created sizeable barriers to opportunity, making it very difficult for foreign-educated physicians to enter the U.S. job market. The main culprit, it appears, is an overly convoluted and lengthy process that foreign educated physicians are required to follow in order to practice in the U.S.

Additionally, non-physicians - both foreign and domestic - should be granted more autonomy and a broader scope of practice. Currently, most states allow physician assistants and nurse practitioners to prescribe controlled substances and physical therapists to see patients without physician referrals. Several additional states allow nurse practitioners to prescribe without physician supervision.

In order to open up the gates of opportunity, state policymakers would be wise to relax occupational licensing requirements to permit non-physician health care providers to expand their role in the delivery of health care. Evidence has shown that recent state efforts to broaden the scope of practice of non-physicians does not appear to reduce the quality of care delivered to patients.

Although there is a need for a formal process for foreign-trained health care providers to transition into the lawful practice of medicine in the U.S., determining whether or not all of these steps are necessary-and if our true intentions are to simply protect the public interest-remain unclear at best. It is possible that the American Medical Association is merely attempting to limit competition.

An article from The Atlantic further notes the strenuous steps needed to complete the process. An applicant must "acquire a visa, pass the first two steps of the United States Medical-Licensing Exam (USMLE), then become certified by the Education Commission for Foreign Medical Graduates (ECFMG), get into an accredited U.S. or Canadian residency program, and finally, go back and pass step three of the USMLE."

Like most other occupational licensing requirements, the length of U.S. residency programs that foreign-trained physicians are required to complete state by state appears to have no rhyme or reason.

In fact, an analysis conducted by the Center for the Study of Occupational Regulation at Saint Francis University documents the length of such residency requirements in each state.

Several states, including Alaska, Arkansas, Arizona, Colorado, Idaho, Maine, New Jersey, Nevada, and New Jersey, make it particularly difficult by requiring foreign-trained physicians to complete three years of additional residency. We can count Washington, DC, among this group as well. Since the length of residency required varies by state, one question remains: Why is there not a single, uniform system or set of requirements?

We should not unnecessarily discourage foreign-trained physicians from entering the U.S. The economic motivation should be clear: Physicians are paid substantially higher salaries in the U.S compared to what they receive in other countries, and the best and brightest physicians from abroad seek better compensation. Research suggests that nearly half of all foreign-trained physicians seeking residencies in the U.S. fail to secure one on their first attempt.

If the nation's policymakers are genuinely concerned with addressing the projected shortfall in physicians, they must give serious consideration to reforming the process whereby foreign-trained physicians are able to enter into the U.S. to practice medicine.

America is the land of opportunity, and we should encourage physicians that are capable of providing high-quality service to patients that may ultimately spur innovation. It's the American thing to do.


Edward Timmons is an associate professor of economics and Director of the Center for the Study of Occupational Regulation at Saint Francis University in Loretto, PA. 

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