Professional Accreditation

VII. Key Issues: Regulation & Reform >> B. Health Care Regulation >> Health Professionals Regulation >> Professional Accreditation  (last updated 6.10.16)

Overview

The principal rationale for certification and licensure is to ensure a minimum level of competency for all health professionals subject to such requirements. All states retain the authority to establish licensure or certification standards for a large variety of health professionals. In contrast to other domains of regulation, the federal government has never threatened to preempt or compete in this domain of regulation. There are three types of professional licensure used for health professionals: a) mandatory licensure; b) certification; and c) registration. The Duke Center for Health Policy has developed a draft working paper assessing the costs and benefits of professional accreditation and licensure and of Medicare conditions of participation (P6-State Prof Accreditation).

Current Policy

  • Morris M. Kleiner & Alan B. Krueger, 2010. “The Prevalence and Effects of Occupational Licensing,” British Journal of Industrial Relations, London School of Economics, vol. 48(4), pages 676-687, December 2010. NBER paper.
  • Scope-of-Practice Regulations for Nurse Practitioners, According to State (NEJM, 12.15.2010)
  • According to Jason Furman (11.9.15), chair of President Obama’s Council of Economic Advisers, the share of the workforce that has a required state license — for everything from hearing aid dealers to funeral parlor owners — has grown from 5 percent in the 1950s to nearly 29 percent today.
  • Thornton, Robert and Edward Timmons. The de-licensing of occupations in the United States Monthly Labor Review (May 2015). Occupational licensing directly affects nearly 30 percent of U.S. workers today and continues to grow in density and scope. In this article, we identify and analyze those rare instances when occupational licensing laws have been eliminated—what we refer to as “de-licensing.” We also discuss recent examples in which courts decided to limit the scope of occupational licensing laws, and we analyze recent efforts (almost uniformly unsuccessful) of a few states to de-license groups of occupations. The reason proposed for most of these efforts is that excessive levels of licensing have hindered job creation, especially for people with lower levels of education. We argue that the paucity of successful de-licensing efforts is due to intense lobbying by associations of licensed professionals as well as the high costs of sunset reviews by state agencies charged with the periodic review of licensing and its possible termination.
  • State Variations in Licensing Restrictions.
    • The Mercatus Center at George Mason University has ranked states by occupational freedom, taking into account occupational licensing, education, and experience requirements.
    • Reason Foundation that also ranked states’ requirements.

Court Decisions

A landmark U.S. Supreme Court decision in 2015 struck down North Carolina’s licensing regulations for teeth-whitening services — stating it wasn’t necessary to be a licensed dentist to provide teeth-whitening.

Physician Drug Testing

  • California would become the first state to require doctors to submit to random drug and alcohol tests under a measure to appear on the ballot this November. The proposal, which drew approval in early focus groups, was inserted as a sweetener in a broad initiative pushed by trial lawyers that also includes an unrelated measure to raise the state’s financial cap on medical malpractice awards for the first time since 1975, to $1.1 million from $250,000. In California, it is permissible to bundle various measures into one ballot initiative, as long as they address a single subject…Under Proposition 46, the ceiling for pain and suffering awards in medical negligence suits, set at $250,000 by the State Legislature in 1975, would be raised to $1.1 million to reflect inflation. The results of random drug tests on doctors would be reported to the California Medical Board; hospitals would be required to report the names of doctors suspected of abusing drugs or alcohol. Doctors would also be required to consult state prescription databases before prescribing controlled substances to patients, to guard against “doctor shopping.”Under Proposition 46, the ceiling for pain and suffering awards in medical negligence suits, set at $250,000 by the State Legislature in 1975, would be raised to $1.1 million to reflect inflation. The results of random drug tests on doctors would be reported to the California Medical Board; hospitals would be required to report the names of doctors suspected of abusing drugs or alcohol. Doctors would also be required to consult state prescription databases before prescribing controlled substances to patients, to guard against “doctor shopping.” (New York Times 8.1.14).

Research and Analysis

Occupational Licensing in General

  • Licensure Results in Higher Wages. According to Washington Post (11.Morris Kleiner, a professor at the University of Minnesota, whose research has documented the rise of licensure and its effects on the labor market. Being in a licensed profession is associated with as much as 15 percent higher wages, he found, and may slow employment growth in the field.
  • Licensure Results in Less Entrepreneurship. States with less restrictive licensing requirements have higher rates of entrepreneurship among low-income workers, according to a study from the Arizona-based Goldwater Institute.
  • Kleiner, Morris M. Reforming Occupational Licensing Policies. Brookings Institution, March 2015.
  • Morris M. Kleiner & Alan B. Krueger, 2010. “The Prevalence and Effects of Occupational Licensing,” British Journal of Industrial Relations, London School of Economics, vol. 48(4), pages 676-687, December 2010. NBER paper.
  • White House, July 2015. Occupational Licensing: A Framework for Policymakers. Unnecessary licensing requirements create “substantial costs, and often the requirements for obtaining a license are not in sync with the skills needed for the job.”

Occupational Licensing for Medical Services

  • Kleiner, Morris M.Allison Marier, Kyoung Won Park, Coady WingRelaxing Occupational Licensing Requirements: Analyzing Wages and Prices for a Medical Service. NBER Working Paper No. 19906, Issued in February 2014. 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.
  • Westat, Inc. Impact of State Scope of Practice Laws and Other Factors on the Practice and Supply of Primary Care Nurse Practitioners. Final Report. Contract Number: HHSP23320095655WC. November 16, 2015. This study assessed individual and state-level factors which affect decisions by Nurse Practitioners (NPs) about whether to practice in primary care. Of particular interest was the impact of state scope of practice (SOP) regulations on elements of NP practice such as patient load, the flow of patient care, and the management of a patient panel decision. Findings from multivariate regressions analyses demonstrate that both facets of SOP -practice authority and prescriptive authority -have independent and cumulative effects on the decision to practice in patient care. However, independent prescriptive authority appears to be the key SOP factor affecting the decision to practice in primary care. Moreover, while SOP has statistically significant effects on both outcomes, rural location was a far more potent predictor of working in primary care. The analysis also found evidence that SOP effects on the probability of practicing in patient care are more pronounced in urban areas.

General Resources

  • Council on Licensure, Enforcement, and Regulation (CLEAR). CLEAR is an association of individuals, agencies and organizations that comprise the international community of professional and occupational regulation. CLEAR is a dynamic forum for improving the quality and understanding of regulation in order to enhance public protection.
  • Quackwatch.org
  • Benjamin Shimberg and Doug Roederer; Kara Schmitt, Editor. Questions a Legislator Should Ask, Second Edition. The original edition of Questions a Legislator Should Ask is considered a classic among state policy makers. The revised edition contains a list of suggested questions legislators can ask when confronted with a request for professional or occupational regulation, followed by a glossary of terms and a brief bibliography. Price: $7 to CLEAR members or state officials or $10 to others, plus $3.99 shipping and $1 handling per item.

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