 |
|
|
 |
||
|
|
|
|
Medical Monopoly: Protecting Consumers Or Limiting Competition? |
Magazine: USA Today, January 1998
MEDICINE & HEALTH
| Government licensing policies must bear some of the blame for rising health costs and the unavailability of many services. |
AT A TIME when government is looking for ways to reduce spending, it should examine closely the supply side of health care reform. Some experts have raised concerns about an oversupply of specialists who rely heavily on government funding for training, while, at the same time, licensure laws and Federal reimbursement regulations restrict nonphysician providers from entering the health care marketplace.
Any serious reform of the U.S. health care system must address the medical monopoly. Barriers to entry into the health care marketplace are partially responsible for high costs and lack of access to primary and preventive care.
Professional licensure laws and other regulatory restrictions impose significant barriers to Americans' freedom of choice in health care. Clark Havighurst, the William Neal Reynolds Professor of Law at Duke University, has pointed out that "Professional licensure laws have long made the provision of most personal health services the exclusive province of physicians. Obviously, such regulation limits consumers' options by forcing them to use highly trained, expensive personnel when other types might serve quite well."
Individuals should have the legal right to decide with whom they will contract for the provision and coordination of their health care services: doctors, midwives, nurse practitioners, chiropractors, spiritual healers, etc. Any restriction denies them the right to make decisions about their own bodies.
States use three mechanisms for regulating health professionals: licensure, the most restrictive form of regulation, makes it illegal to practice a profession without meeting state-imposed standards; certification, granting title protection to per sons meeting predetermined standards (those without it may perform services, but may not use the title); and registration, the least restrictive form of regulation, requiring individuals to file their names, addresses, and qualifications with a government agency before practicing.
Professional health care associations have been influential in setting the standards for licensure laws in the U.S. Economist Paul Feldstein has identified ways in which such organizations limit competition. The first simply is to have substitute providers declared illegal. If substitute providers are prohibited or severely limited in the tasks they legally are permitted to perform, there will be a shift in demand away from their services. That approach has been used with lay midwives. In addition, states impose professional "scope-of-practice" regulations that prevent nurse practitioners from functioning independently as primary care providers.
Another method of limiting competition-used when licensure and scope-of-practice fail--is to restrict or limit substitute providers' services from payment by government health programs. That approach has been used by organized medicine, for instance, to limit access to chiropractic treatment. Medicare regulations prohibit reimbursement to chiropractors for services they are licensed to perform in all 50 states. The Federal reimbursement regulations appear not to be based on empirical evidence. The government's Agency for Health Care Policy and Research released national guidelines in 1995 that recommend spinal manipulation as a safe and cost-effective treatment for acute back problems. The following examples show how the medical monopoly has used the power of government to restrict the practice of a variety of nonphysician health care providers:
Midwifery. Thirty-six states restrict or outright prohibit the practice of lay midwifery. Consequently, a mere five percent of U.S. births are attended by midwives, compared with 75% in Europe. Americans' low usage of midwifery does not correlate with high-quality birth outcomes. The U.S. has the second highest caesarean rate in the world and the fifth highest infant mortality rate among Western industrialized nations.
There are an estimated 10,000 midwives in this country who fall into two categories: the certified nurse-midwife and the lay midwife. Certified nurse-midwives are registered nurses with two years of advanced training who most often work under the supervision of a physician and practice in clinic or hospital settings. They represent approximately 4,000 of the midwives nationwide.
By contrast, lay midwives enter the profession directly from independent midwifery schools or through apprenticeship. They are trained to meet individual state requirements for licensure, registration, or certification. Unlike certified nurse midwives, though, most lay midwives practice independently in consultation with physicians, not under direct physician supervision. About half the 6,000 lay midwives are associated with religious groups, and a majority of home births are attended by them.
Safety most commonly is cited as the reason for prohibiting or restricting lay midwifery in 36 states. Those licensure laws and regulatory restrictions, however, do not appear to be based on empirical findings of childbirth outcomes. The National Birth Center study on nearly 12,000 nonhospital births found a neonatal mortality rate for midwife-assisted deliveries comparable to hospital births. Moreover, physician-attended hospital deliveries were 10 times more likely to require intervention (forceps, vacuum extractor, or caesarean section) than midwife-assisted home births.
Midwives are considerably less expensive than traditional obstetric care providers. According to the Health Insurance Association of America, the average physician-attended birth costs $4,200; Midwives Alliance of North America reports that the average cost of a midwife-assisted birth is $1,200.
Most important, though, is that women report significant personal and psychological benefits from midwife-assisted births. Since the early 1970s, a home birth renaissance has been sparked by feminist politics, the women's health and holistic health movements, back-to-nature ideology, and health consumerism.
As a result of midwives' success, a wide range of health organizations, including the American Public Health Association, National Commission to Prevent Infant Mortality, and World Health Organization, advocates their expanded use. The strongest advocacy has come from the women's health movement with support from the Boston Women's Health Book Collective, National Black Women's Health Project, National Women's Health Network, and Women's Institute for Childbearing Policy.
Yet, despite midwives' record of safety and mothers' reports of psychological and personal benefits, the medical community continues to enforce licensure laws that restrict women's birthing options. Moreover, it often refuses to provide backup sup port to women who choose to deliver at home, despite midwives' record of safety and low malpractice claims. A 1994 study of childbirth choices found that 20% of mothers delivering in the hospital setting would have preferred a nonhospital delivery, but n o medical backup support was readily available.
Another study at the Medical College of Pennsylvania found that women met forceful resistance from physicians when they disclosed their plans for home delivery. Accordingly, "A number of women found it ironic, and even unconscionable, that physicians who criticized home birth as unsafe also re fused to provide the prenatal care which all would agree would increase the safety of pregnancy and birth under any circumstances. Some concluded on these grounds that these physicians' motivation must have more to do with self-interest (in terms of power, authority, and money) than with interest in the health and safety of their patients and their babies."
It should be noted that fear of malpractice may have played a large part in the physicians' decisions to refuse backup support. Further, medical attitudes about midwifery and home births vary greatly among physicians and geographical areas. States that grant legal status to lay midwives in the form of licensure, certification, or registration are Alaska, Arkansas, Arizona, Colorado, Florida, Louisiana, New Hampshire, New Mexico, Montana, Oregon, South Carolina, Texas, Washington, and Wyoming.
Nurse practitioners. Particularly in underserved areas and long-term care facilities, registered nurses with advanced training--nurse practitioners--are able to provide most basic health services performed by physicians, and at lower costs. The American Nurses Association estimates that, of the 2,100,000 registered nurses nationwide, approximately 400,000 deliver primary care. Many of them are practicing in managed-care organizations under the supervision of physicians. About 21,000 nurses have received advanced training at graduate schools of nursing and are licensed nurse practitioners.
Research shows that 75-80% of adult primary care and up to 90% of pediatric primary care services could be provided safely by nurse practitioners. A study by the Office of Technology Assessment found that the outcomes of nurse practitioner care we re equivalent to those of services provided by physicians, and that nurse practitioners actually were more adept in communication and preventive care. An Office of Technology Assessment report indicates that increasing access to nurse practitioner services could be especially advantageous for the home-bound elderly.
The economic loss from inefficient use of primary care nurse practitioners is estimated to range between $6,400,000,000 and $8,750,000,000. Analysis conducted by the American Nurses Association in 1993 showed that nurse practitioner care resulted in fewer hospitalizations, higher scores on patient satisfaction, and lower cost per visit--$12.36 compared to $20.11 for physicians. In addition to projected savings on direct health services, the taxpayer burden for training nurse practitioners is approximately one-fifth that of training physicians.
Despite empirical evidence that nurse practitioners can provide primary care safely, many states impose scope-of-practice regulations that prevent nurses from practicing independently as primary care providers. Moreover, some states give their medical boards regulatory control over boards of nursing. That gives one profession full veto power over the rules and regulations of its competitors.
Scope-of-practice regulations often dictate that nurses must work in coordination with physicians. For example, 48 states grant nurse practitioners prescriptive authority, but mandate that nurses must have a written practice agreement or work in collaboration with a physician. About 20% of states grant nurse practitioners the legal right to prescribe drugs independent of a physician. However, even some of those states limit the independent nurse practitioner's prescription authority by law to 72 hours. What that means for competition is that consumers--for instance, elderly Medicare recipients who live in rural areas--would have to visit independent nurse practitioners every three days to renew prescriptions.
Proponents do not call for increased government regulations that would force Medicaid or Medicare recipients to substitute nurse practitioner care for physician services. Instead, they argue that Americans should not be restricted from choosing lo w-cost alternative practitioners and forced to subsidize an oversupply of highly specialized physicians. Let nurse practitioners legally compete in the health care market and allow consumers to choose among qualified health providers on the basis of quality and cost, they suggest.
|
Chiropractic Care |
The chiropractic profession has faced significant challenges by organized medicine for more than 100 years. For instance, between 1963 and 1974, the American Medical Association operated a Committee on Quackery with an intent to "expose the charlatanism of chiropractic." The AMA urged members to lend "their full support to the continuing vigorous attack on medical quackery and to the education program on the cult of chiropractic."
Although the AMA certainly had every right to criticize medical practices with which it disagreed, the organization resorted to lobbying the government for restrictions on chiropractic practice. Today, chiropractors are subject to numerous restrictions on their scope of practice.
In addition, the AMA recommended that Congress exclude payment for chiropractic services from Federally supported health programs. As a result, Medicare recipients are restricted from using the full range of chiropractic services. Medicare reimburses chiropractors for performing "spinal manipulation," but requires that a diagnostic spinal X-ray be taken before chiropractic treatment. The catch is that Medicare does not reimburse chiropractors for performing X-rays, even though they have the training and are licensed to do so in all 50 states. That policy gives the medical profession control over managing back problems among elderly Americans.
These restrictions apply even though the Federal government's Agency for Health Care Policy and Research (AHCPR) has released national pain guidelines recommending spinal manipulation for the common complaint of acute lower back pain. It is estimated that 80% of all adults suffer from back pain at some time in their lives, and an estimated 91% of older adults (ages 65-74) report back ailments. The AHCPR estimates that Americans could save more than $1,000,000,000 annually by using noninterventionist approaches for managing back pain if just 20% of practitioners followed the agency's recommendations.
In 1976, four chiropractors filed an antitrust lawsuit against the AMA, five of its officers, and 10 other medical organizations, including the American Hospital Association, charging them with criminal conspiracy to destroy chiropractic. Plaintiffs alleged a conspiracy that included preventing medical doctors and doctors of osteopathy from associating professionally with chiropractors, defining it as unethical for M.D.s to accept referrals from chiropractors, and prohibiting chiropractors from u sing hospital diagnostic laboratory and radiological facilities, among other things. In 1987, the AMA was found guilty of illegal conspiracy and it was ruled that the organization's anti-quackery activity was in violation of U.S. anti-trust laws. Yet, restrictions on chiropractic scope of practice and reimbursement remain in place.
Vitamins and herbs. For years, mainstream medicine spokesmen have maintained that individuals who use unconventional therapies--such as vitamin therapies and herbal products--are not acting according to scientific rationale and therefore need to be protected by the government. The president of the National Council Against Health Fraud, William Jarvis, has suggested that regulators are failing to protect the public against quackery. Jarvis explains that "the real issues in the war against quackery are the principles, including scientific rationale, encoded into consumer protection laws, primarily by the U.S. Food, Drug, and Cosmetic Act. More such laws are badly needed."
One way the Food and Drug Administration combats fraud is to pull herbal products from the shelf if manufacturers make specific health claims about their usefulness without first obtaining FDA approval. Some providers even have been subject to criminal prosecution. Getting herbal remedies through the drug approval process is unrealistic, though. Botanicals are not patentable (although they can be patented for use), and the expense of their approval as drugs would be difficult to recover. The cost of taking a new drug to the market in the U.S. is close to $400,000,000, and it takes nearly 15 years to complete the process.
Nevertheless, Americans are expressing an increased interest in nutritional and herbal therapies. According to the World Health Organization, about 4,000,000,000 people--almost 80% of the global population-use herbal remedies for some aspect of their health care. Still, the FDA often considers herbal remedies to be worthless or potentially dangerous.
Health care regulators defend their position as necessary to protect consumers. Yet, research has shown that users of unconventional therapies are well-educated and have higher-than-average incomes. Even in countries with socialized health systems that provide access to conventional medical care for all citizens, users of unconventional therapies and practitioners usually are from higher social classes.
There is little actual evidence that medical licensing improves quality or protects the public. Medical economist Gary Gaumer, reviewing all the available literature on medical licensing, concluded, "Research evidence does not inspire confidence t hat wide-ranging systems for regulating health professionals have served the public interest. Though researchers have not been able to observe the consequences of a totally unregulated environment, observation of incremental variations in regulatory prac tice generally supports the view that tighter controls do not lead to improvements in the quality of service."
Even the Federal Trade Commission has concluded that "occupational licensing frequently increases prices and imposes substantial costs on consumers. At the same time, many occupational licensing restrictions do not appear to realize the goal of in creasing the quality of professionals' services."
|
The Public at Risk |
Licensing laws actually may put the public more at risk by lulling consumers into a false sense of security. Terree Wasley points out in What Has Government Done to Our Health Care? that most state licensing laws permit licensed physicians to perf orm all types of medical services, even those for which they are not specifically trained. For instance, in Massachusetts, physicians are licensed to perform acupuncture even though they may not have received special training.
While the public safety benefits of medical licensure may be questionable, nearly all economists recognize that professional licensure laws act as a barrier to entry that decreases competition and increases price. One of the earliest studies of th e impact of licensure on physician income was done in 1945 by Nobel Prize-winning economist Milton Friedman and Simon Kuznets. They found that the difference in income between professional and nonprofessional health care workers was larger than could be explained by the extra skill and training of the professionals. A large portion of the variation, they concluded, was due to licensing restrictions.
In addition to using government to restrict competition, the medical monopoly turns to it for subsidies. For example, most physician training is subsidized by the Federal government.
In 1927, student fees accounted for 34% of medical school revenues. Today, less than five percent of medical school revenues comes from tuition and fees. Instead, medical schools rely heavily on Federal and state support.
Medicare payments to hospitals represent the largest source of Federal funding for medical education and training. Hospitals receive direct payments from Medicare based on the number of full-time-equivalent residents employed at each institution. In addition, Medicare increases a hospital's diagnostic-related group payments based on the ratio of residents to hospital beds.
Medical schools and teaching hospitals receive additional Federal funding from the National Institutes of Health, the Department of Veterans Affairs, the Department of Defense, and the Health Resources and Services Administration (Title VII) progr am. Federal funding for research, training, and teaching amounts to at least $5,000,000,000 a year, awarded to medical schools and affiliated hospitals in the form of grants and contracts. Supporting biomedical research in medical schools is another way the government subsidizes medical education without appearing to do so directly.
A less direct form of subsidy is the ability of the health care establishment to direct government payments from the Medicare and Medicaid programs to "approved" providers and hospitals. Chiropractors and other nontraditional providers have genera lly been excluded from Medicare reimbursement. Furthermore, in order to be eligible to participate in Medicare, a hospital must be accredited by the Joint Commission on Accreditation of Health Care Organizations (or the American Osteopathic Association i n the case of osteopathic hospitals). The JCAHO, which the Wall Street Journal describes as "one of the most powerful and secretive groups in all of health care," is a private organization with a board dominated by members representing the AMA and the Am erican Hospital Association.
As several medical economists studying the issue have noted, inasmuch as Medicare is a major source of hospital revenues, "the influence of the JCAHO can be used to limit hospital competition and to protect physicians [against competition] from ot her groups of providers by denying them access to hospitals or influence within hospitals." Thus, the medical monopoly is able to use Federal funds to reward its members and restrain competitors.
The time is right for eliminating barriers to nonphysician health care providers. Many Americans are seeking low-cost nontraditional providers and even choose to pay out-of-pocket for their services. Breaking the anti-competitive barriers of licen sure laws and Federal reimbursement regulations will provide meaningful health reform, increase consumer choice, and reduce health care costs.
By Sue A. Blevins
Ms. Blevins is a health policy consultant, Boston, Mass. This article is based on a Cato Institute Policy Analysis.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
