Scholarly Comments on Academic Economics

Licensing Doctors: Do Economists Agree?

by

*Shirley Svorny* is chair of the economics department at California State University, Northridge. She holds a Ph.D. in economics from UCLA. From 1981 to 1984, she was engaged in policy analysis for the Getty Oil Company. In 1986-87, she managed an industr

Abstract

Despite the wide reach of medical licensing in health care production through its impact on the nature and cost of care, it has been all but ignored in debates over health care reform. This paper pulls together statements made by economists whose expertise is in the area of health economics or, more specifically, medical licensure and discipline. Economists who have examined the market for physician services in the United States generally view state licensing as a means by which to enforce cartel-like restrictions on entry that benefit physicians at the expense of consumers. Medical licensing is seen as a constraint on the efficient combination of inputs, a drag on innovations in health care and medical education, and a significant barrier to effective, cost efficient health care.