Some Questions About An Alternative World

by Don Boudreaux on July 24, 2006

in Health

Imagine a world in which anyone who wishes to practice medicine can do so legally — or, put differently, imagine a world in which people seeking medical care can buy it from anyone they choose.  What would be some features of that world?

Would persons not holding MDs be allowed to present themselves as MDs?  (I suspect not.  Common-law rules prevent such misrepresentation.)

Would persons holding MDs from the likes of SuperFast&Cheap Online University be indistinguishable, in the public’s eye, from persons holding MDs from the likes of Harvard University or Johns Hopkins University?  (I suspect not.  The importance of certifying the quality of medical degrees would rise in the absence of medical-licensing statutes.  And I’d bet that one of the ways that Harvard Medical School and other legitimate medical schools would compete against each other for quality students would be to offer their graduates services that certify to potential patients the legitimacy and quality of the degree held by each of their graduates.)

Would persons seeking medical care not seek out certification of the quality of the physicians they contemplate using?  (I suspect not.)

Would the number of quacks practicing medicine profitably rise?  (I suspect so, because some people have a demand for quackery.  Why should these people be prevented from buying quack "medicine" if that’s what they want?)

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{ 34 comments }

atr July 24, 2006 at 11:56 am

"Why should these people be prevented from buying quack "medicine" if that's what they want?"

That's an easy one…

For their own good!

save_the_rustbelt July 24, 2006 at 12:19 pm

Ill-informed consumer (bad pun) do not have equal bargaining power with quacks.

How about if Harvard is jointly liable for any malpractice committed by its graduates???

Don July 24, 2006 at 12:25 pm

On top of a filter like Harvard Medical School, you have entities like the American College of Obstetrics and Gynecology. You also have the highly competitive race among aspiring medical professionals to affiliate with prestigious teaching hospitals and research institutions. These institutions would be the foundation of such a system, and more consumer friendly filters would spring up to complement them.

John Dewey July 24, 2006 at 1:05 pm

IMO, the most important protection offered by medical licensing is the protection of those who cannot legally make their own decisions. Children and mentally impaired persons currently will not legally receive medical care from quacks and grossly incompetent doctors. The state, through the regulatory power of medical boards, prevent parents and guardians from taking the helpless to unqualified doctors in order to save a few bucks.

I have seen it argued some helpless individuals are denied medical care due to the higher costs driven by medical licensure. I know of no city in the U.S. that is devoid of free medical services for the indigent.

spencer July 24, 2006 at 1:10 pm

"Would persons seeking medical care not seek out certification of the quality of the physicians they contemplate using? (I suspect not.)"

This is exactly what licensing does, at least a certificate that attest to some level of minimum competency.

What is the difference from this theorical construction and the current real life situation that you find so objectionable?

It appears that you have backed into advocating licensing.

Don Boudreaux July 24, 2006 at 1:18 pm

Spencer,

Sears certifies that the Maytag washing machines it sells won't fly into a thousand pieces, injuring mom as she does the laundry, or otherwise break down in a matter of months. This is a private means of providing quality certification — a private means that more reliably responds to consumers' true concerns — a means not imposed from above by politicians — a means subject to competition. It's voluntary rather than coercive.

The differences are huge.

Isaac Crawford July 24, 2006 at 1:18 pm

"I have seen it argued some helpless individuals are denied medical care due to the higher costs driven by medical licensure. I know of no city in the U.S. that is devoid of free medical services for the indigent."

By free you mean cost to the patient, right? Certainly we all know that nothing is free..

Isaac

happyjuggler0 July 24, 2006 at 1:21 pm

The big problem with licensing is that you need to learn 5000 things in order to legally be able to perform things that most definitely do not require a zillion hours of education.

This drives up the price of not only the "easy" things that the licensed doctors and nurses say only they may* do(*distinguishing between "may" and "can" here is important). It drives up the prices of all the harder procedures too because those few individuals who can perform the difficult tasks have much more limited available time due to the easy things they must perform that take up so much of their time.

Isaac Crawford July 24, 2006 at 1:24 pm

"What is the difference from this theorical construction and the current real life situation that you find so objectionable?

It appears that you have backed into advocating licensing."

Nobody ever said that licensing is bad. The question is who does the licensing? Like anything else, the government does not do as well as private companies in licensing. Think about it, what holds more weight, a license from the government to practice medicine, or a certificate showing that that doctor is a fellow of the academy of (insert medical specialty here) doctors? There would also be many more sources of information available to consumers. Both Underwrites laboratories and Consumer reports have fulfilled a demand for consumer information, why would medicine be any different?

Isaac

John Dewey July 24, 2006 at 3:13 pm

Isaac Crawford,

When a medical license is revoked, the physician can no longer legally practice medicine. He can no longer receive any return on the huge investment he has made in training and in building up a reputation. Not so with certification.

An uncertified physician would risk lawsuit if he practiced medicine and claimed to be certified. An unlicensed physician faces jail time if he practices medicine without a license.

For me, licensing carries much more weight than certification. The physician has much more to risk by giving improper medical treatment. I believe teh power of the state to revoke licenses is what ensures patients receive quality care.

bbartlog July 24, 2006 at 3:15 pm

Another benefit to allowing people widely perceived as 'quacks' to practice is that they may be right some of the time. People who patronize them are effectively voluntarily conducting medical experiments (for free) which would be unethical or at least very expensive to conduct in any other way.
I second the point about the cost of simple procedures conducted by highly trained professionals. To some extent the medical professions(s) have already compensated by allowing highly trained nurses (nurse practitioners?) to do some procedures, but deregulating licensing would be even better.

John Dewey July 24, 2006 at 3:25 pm

happyjuggler: "The big problem with licensing is that you need to learn 5000 things in order to legally be able to perform things that most definitely do not require a zillion hours of education."

I agree somewhat. I would prefer to solve that problem by allowing licensed nurses to perform more tasks that physicians now perform.

As I understand it, a nurse practitioner (NP) is allowed to perform doctor's tasks in locales where few physicians are available. That sort of exception makes no sense to me. If an NP can perform a function in a rural area, why not everywhere?

I do not agree that highly specialized but lightly trained medical persons should be allowed to perform most NP tasks. IMO, the human body is so complex, and its organs so interdependent, that at least a couple of thousand hours of training should be required.

George Paras July 24, 2006 at 4:37 pm

A real-world example of quack medicine being practiced in the marketplace is the sale of homeopathic "medicines" (wherein the underlying theory is that the more you dilute a substance in water, the more powerful its effects). This has taken off much more in Europe than in the US, but it is all over. The Fed. government doesn't regulate these substances – mainly because they don't actually do anything and, besides, they are almost completely water. In this case there are only a few skeptics, but many people are purchasing these items. Here, the problem is exactly the existence of the FDA. Almost everyone just assumes that the FDA is there to ensure that all medicines work. In fact its main policy is to ensure that medicines don't cause harm. As a consequence, there is no market-based certification or watchdog because the public assumes that the FDA is taking care of this. Solution: An organization such as Consumer's Union could perform tests and publish results on the utility of homeopathic medicines (through its magazine).

John Dewey July 24, 2006 at 4:49 pm

George Paras,

It seems to me the problem isn't the existence of the FDA. If your post is correct, the problem is that the FDA's function is misunderstood by the public. That ignorance may be the FDA's fault, but it doesn't indicate to me the FDA isn't fulfilling its mission.

George Paras July 24, 2006 at 5:09 pm

John,

The problem is that no one steps up to create a private testing/certification organization because the assumption is that the FDA will perform that function. You're right, of course, the FDA is – nominally – fulfilling its mission, and I didn't mean to imply that FDA performance is at fault. Nevertheless, no one is actively seeking to establish whether homeopathic medicines actually work – and no one is looking for that proof, because the assumption that FDA silence is FDA approval.

bbartlog July 24, 2006 at 5:16 pm

George Paras -
your summary of homeopathy is something of an oversimplification. The *theory* behind homeopathy is IMO as bogus as a three-dollar bill, but in actuality the compounds sold under that umbrella are often not so dilute as to be equivalent to water. For example, there is a homeopathic teething gel (which I have used) which has as its active ingredient some sort of belladonna extract. It is indeed extremely dilute (parts per million IIRC) but does have a topical effect.
At its best, homeopathy preserves the use of certain older remedies which have been found through experience to be effective. At its worst, of course, it treats deadly disease with colored water.
Purely anecdotal, but the British royal family are big believers in homeopathy, and it seems not to have done the Queen Mother any harm.

false_cause July 24, 2006 at 5:22 pm

Every bottle of herbal medicine I've seen has a warning on the label that the FDA hasn't evaluated the product for effectiveness. Not suggesting that this negates your point, George, but it might mean there's more going on than just a widespread assumption about the FDA.

George Paras July 24, 2006 at 5:32 pm

bbartlog, & False_cause,

Agreed and agreed. So where are the testers? It seems that there are two camps (with people in-between, obviously): homeopathic believers and cynics. I hear mostly one or the other out there, but I don't know of any place that will separate the wheat from the chaff.

Noah Yetter July 24, 2006 at 6:21 pm

"I believe teh power of the state to revoke licenses is what ensures patients receive quality care."

John I believe what you meant to say was this:
"…the power of the state to revoke licenses is what ensures patients pay too much for care."

A large part of the point of this thought experiment is to show that people would not likely choose to see an uncertified doctor, much less one who had his/her certification revoked (such information being easily accessible at the website of the hypothetical certifying entity). Furthermore selling medical services under the false pretense of possessing such certification is clearly fraud, so there's your threat of jail time.

Government licensing does nothing for the consumer that private certification would not. What it does do is protect the interests of the medical industry at our expense.

John Dewey July 24, 2006 at 6:48 pm

Noah: "such information being easily accessible at the website of the hypothetical certifying entity"

That might work for everyone who knows how to find the websites. The current system works for everyone, even those who don't have a computer or don't have the ability to navigate the web.

Noah: "Government licensing does nothing for the consumer that private certification would not."

Sorry, but I disagree. Government licensing has the power of the state behind it. That effectively prevents unlicensed doctors from practicing medicine. Certification does not prevent uncertified doctors from practicing medicine.

John Dewey July 24, 2006 at 6:56 pm

Noah: "John I believe what you meant to say was this: …the power of the state to revoke licenses is what ensures patients pay too much for care."

No, I certainly didn't mean to say that.

I don't see how government licensing of doctors and nurses ensures patients pay too much for medical care. Government grants and revokes licenses of tractor trailer drivers. That doesn't mean we pay too much to have goods shipped.

Is your argument that government doesn't grant enough medical licenses? Or is it that government has reserved for physicians work that non-physicians could perform?

han meng July 24, 2006 at 7:09 pm

I suppose I have no right to object to people conducting medical experiments on themselves, but these experiments are of limited value: they are not randomized double-blind placebo controlled studies that provide statistically significant results.

Sameer Parekh July 24, 2006 at 7:27 pm

John,
"That sort of exception makes no sense to me."

It makes perfect sense. It's called a cartel. Competition is allowed where it isn't a threat.

Steven Donegal July 24, 2006 at 8:11 pm

What I particularly enjoy is that these sentiments seem to be most often held by tenured professors at state universities.

doinkicarus July 24, 2006 at 10:53 pm

Steven –

I hold these positions and I am neither tenured, nor a professor. Seems your argument is a bit of the ad hominem variety. Oh well.

False Cause, you said "Every bottle of herbal medicine I've seen has a warning on the label that the FDA hasn't evaluated the product for effectiveness."

You think they put this label on there voluntarily? Any coincidence that the exact same warning appears on every bottle? The FDA mandates the "warning," if you will call it that. It doesn't say that "this product is harmful" – it merely says, if you'll allow me to paraphrase, "The FDA hasn't bothered to test this concoction, erego the FDA cannot attest to its efficacy."

JohnDewey July 25, 2006 at 4:48 am

doinicarus: "The FDA hasn't bothered to test this concoction, erego the FDA cannot attest to its efficacy".

That's not fair to the FDA. It is not their job to attest to the efficacy of such medicines. They elected representatives of the public have neither authorized the FDA to perform such tests nor granted them the funding to do so.

JohnDewey July 25, 2006 at 5:13 am

Sameer: "It's called a cartel. Competition is allowed where it isn't a threat."

I think the "cartel" might argue that patients in such rural areas are receiving substandard health care. Substandard care is being allowed because that's better than no care at all.

I do agree that MD's, through control of medical boards, have acted as a cartel. However, the composition of medical licensing boards has been changing the past few decades. The Texas Medical Board is composed of:

8 M.D.'s;

2 D.O.'s (Doctors of Osteopathy);

2 non-medical educators;

1 corporate finance executive;

1 Associate Managing Editor of the Harvard Journal of African American Public Policy;

1 public relations consultant;

1 political appointee who appears to be wholly unqualified for the job.

I would prefer to see more business-oriented members on that board. It would make more sense to have insurance and employer representatives who would represent those who pay for medical services.

JohnDewey July 25, 2006 at 5:17 am

I was incorrect about the FDA. Here's its mission statement:

"The FDA is responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, our nation’s food supply, cosmetics, and products that emit radiation. The FDA is also responsible for advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and more affordable; and helping the public get the accurate, science-based information they need to use medicines and foods to improve their health."

Doinkicarus was being more than fair in his statement.

Keith July 25, 2006 at 9:48 am

There are existing examples for the "private certification" model versus the "state licensing" model. I'd suggest looking at industrial hygiene. I think its a good contrast to the medical industry.

John Thacker July 26, 2006 at 11:28 am

For me, licensing carries much more weight than certification. The physician has much more to risk by giving improper medical treatment. I believe teh power of the state to revoke licenses is what ensures patients receive quality care.

So do you oppose malpractice lawsuits, then, or believe that they could not play a role of guarding against improper treatment? There are also reasonable cases put forth that the stronger the licensing requirements of a country, the more tightly restricted malpractice lawsuits and payouts should be.

Government grants and revokes licenses of tractor trailer drivers. That doesn't mean we pay too much to have goods shipped.

Most likely we do. In NYC there are too few taxis, and most states require hair braiders to become licensed as full cosmetologists, even if they don't do any of those services that they're tested on.

JohnDewey:

There are two effects. Yes, many of the regulations do likely increase the average quality of the goods or services provided. (Not always, if the cartel is particularly bad, but generally in order to justify the regulation they do so.) However, if it restricts the supply to those of higher quality, it certainly increases cost. Reasonable people can disagree on whether it's justified, but economists naturally take a dim few of a law which prevents voluntary transactions. There's an impressive web with licensing and medical schools. The licensing raises doctors' salaries, but the medical schools use this fact to limit enrollment and raise tuition, gaining many of the advantages from the restraint in trade.

Certainly you can concede that some people would be better off with a choice of somewhat lower quality but much cheaper care in addition to more expensive but better quality care. The natural response is about gathering the information; how are patients to determine the quality of care? I believe that experience shows that it is possible to use certification, both public and private, instead of licensing to guarantee standards of care.

I believe that the increase in welfare from such a change would be largest among the poor, who are hurt the most by the licensing laws.

John Dewey July 26, 2006 at 2:25 pm

John Thacker: "Certainly you can concede that some people would be better off with a choice of somewhat lower quality but much cheaper care in addition to more expensive but better quality care."

I will not concede they will be better off if lower quality "doctors" cut into their bodies. Nor will I concede they will be better off if lower quality "doctors" prescribe potentially deadly or addictive drugs, especially those drugs known to have complex effects on the human body.

I will concede that licensed Nurse Practitioners could perform other tasks now limited to physicians.

John Thacker: "it is possible to use certification, both public and private, instead of licensing to guarantee standards of care."

With respect to medical licensing, we disagree on this point.

John Thacker: "Economists naturally take a dim few of a law which prevents voluntary transactions."

As do I, generally. But not in this case.

Economists do not make the rules. I am confident medical licensing will not go away in my lifetime, regardless of how many economists and libertarians line up to oppose it.

John Thacker July 27, 2006 at 5:02 pm

"Nor will I concede they will be better off if lower quality "doctors" prescribe potentially deadly or addictive drugs, especially those drugs known to have complex effects on the human body."

A situation which of course exists today as well, though, even with licensing. Many are the patients who go to a doctor demanding some kind of drug and eventually find a licensed doctor who will prescribe it.

"I will not concede they will be better off if lower quality "doctors" cut into their bodies."

Really? Even if the other choice is no care at all? Tell it to the people traveling to India to get surgery. Is going to the doctor half as often (or less) really a better solution for people? Or turning to pseudoscience and quackery as people already do?

Whether or not something will go away in your lifetime has nothing to do with whether or not it would be a good idea, though.

The increased use of Nurse Practitioners and Nurses is, I agree, a way around the cartel and to decrease its power.

I'm also not convinced that license revoking is really such a motivation. Most doctors I know are far more concerned about malpractice suits and their malpractice insurance, which would continue to exist just as they are now in the absence of mandatory licensing. Are the medical review boards really as fierce and scary to doctors as malpractice lawyers and insurance agents?

john g July 28, 2006 at 8:48 pm

Cartel? The most successful cartel in history. How numb we have become to it. We walk in to a medical office and don't even notice that there are no prices listed for anything. If you ask they won't tell you. Only a cartel can do that!

How do we know we are getting good care? Without competition how can we make comparisons?

JohnDewey July 30, 2006 at 5:11 pm

John Thacker,

More doctors worry more about malpractice suits because unqualified parties – juries – determine whether malpractice has occurred. All doctors – even those who practice correctly – are threatened by malpractice suits. On the other hand, only the very few physicians who are truly a threat to the public have reason to fear medical licensing boards.

Medical licensing boards most certainly revoke or suspend temporarily the licenses of physicians for a variety of reasons. The following link shows the type investigations ocnducted by the Medical Licensing Board of California.

http://tinyurl.com/k4w8d

As the document show, 1,054 investigations were conducted in California in FY2005. A total of 361 disciplinary actions were taken by the board that year.

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