Thanks to The Cato Institute for the use of this article!
|Cato Policy Analysis No. 246
||December 15, 1995
by Sue A. Blevins
Sue A. Blevins is a writer and health policy consultant based in Boston.
Nonphysician providers of medical care are in high
demand in the United States. But licensure laws and federal
regulations limit their scope of practice and restrict access
to their services. The result has almost inevitably been
less choice and higher prices for consumers.
Safety and consumer protection issues are often cited as
reasons for restricting nonphysician services. But the
restrictions appear not to be based on empirical findings.
Studies have repeatedly shown that qualified nonphysician
providers--such as midwives, nurses, and chiropractors -- can
perform many health and medical services traditionally performed by physicians -- with comparable health outcomes, lower
costs, and high patient satisfaction.
Licensure laws appear to be designed to limit the supply
of health care providers and restrict competition to physicians from nonphysician practitioners. The primary result is
an increase in physician fees and income that drives up
health care costs.
At a time government is trying to cut health spending
and improve access to health care, it is imperative to examine critically the extent to which government policies are
responsible for rising health costs and the unavailability of
health services. Eliminating the roadblocks to competition
among health care providers could improve access to health
services, lower health costs, and reduce government spending.
I am myself persuaded that licensure has reduced
both the quantity and quality of medical practice.
. . . It has forced the public to pay more for
less satisfactory medical service.
Although broad-based health care reform has temporarily
moved to the back of the public agenda, there remain serious
problems of cost and access in the American health care
system. The underlying reason for those problems is the
lack of a functioning free market in health care in this
country. There is privately owned health care, but there is
not a living, vibrant free marketplace in health care like
there is in other products and services.
Healthy markets have certain common characteristics.
On the supply side, there is a choice of providers, in
competition with one another, trying to gain customers on
the basis of price and quality. And on the demand side,
there are consumers seeking the best deal for their dollar.
In today's health care system, neither of those conditions
During the 1994 health care reform debate, much attention was given to the demand side of the market.  That
attention led to the development of ideas such as medical
savings accounts to make health care consumers more cost
However, true reform requires that the supply side of
the health care market be addressed as well. Currently, a
wide variety of licensing laws and other regulatory restricions limits the scope of practice of nonphysician professionals and restricts access to their services. Moreover,
at the same time that it is restricting the practices of
nontraditional health care professionals, government is
providing subsidies for the education and training of physcians who fit the medical orthodoxy. The result has been
the creation of a de facto medical monopoly, leading to less
choice and higher prices for consumers.
Therefore, true health care reform must involve ending
the government-imposed medical monopoly and providing consumers with a full array of health care choices.
The Demand for Alternative Therapies
Every year millions of Americans seek providers who
offer health care therapies that are neither widely taught
in medical schools nor generally available in U.S. hospitals. Researchers from Harvard Medical School studied the
health care practices of U.S. adults and estimated that 22
million Americans sought providers of unconventional care in
1990. The study, reported in the New England Journal of
Medicine, estimates that in 1990 Americans made more visits
to providers who offered unconventional therapies than to
all primary care physicians--425 million compared to 388
million visits. 
Researchers estimate that 34 percent of Americans used
at least 1 of 16 unconventional therapies, such as chiropractic, herbal, and megavitamin therapies, in 1990.  Back
problems were the most commonly reported "bothersome or
serious" health problem for which consumers sought nontraditional services. 
There is a great willingness to pay out-of-pocket for
providers who offer unconventional health services. The
Harvard researchers found that total projected expenditures
on providers of unconventional care amounted to $11.7 billion in 1990. Nearly 70 percent--$8.2 billion--of that
amount was paid by the consumer, rather than insurers or
government. By contrast, only 17 percent of the bill for
total physician services was paid out-of-pocket in 1990. 
According to U.S. Census data, receipts for nonphysician providers  grew by 83 percent--from $10.3 billion to
$18.9 billion--between 1987 and 1992,  while physician
receipts increased by 56 percent, from $90 billion to $141
billion. Census data show that employment by nonphysician
establishments grew by 50 percent, while jobs in hospitals
and physician offices increased less than 20 percent between
1987 and 1992.
Medical schools are responding to the consumer demand
for unconventional health services. To date, 34 out of the
126 medical schools nationwide have started or are developing courses that focus on "alternative medical practices." 
It should be noted, however, that medical schools rely
heavily on federal subsidies, while training for nonphysician providers is predominantly funded with private money.
For example, all of the 17 chiropractic schools in the United States are privately funded; none are state owned. 
By contrast, 76 of the 126 medical schools are state
Supply of Selected Health Care Providers, United States
|Type of Provider
|Doctors of osteopathy
| Certified nurse
| Primary care
| Nonprimary care
Source: Data on acupuncturists, homeopathy, N.D.s (1992),
chiropractors, D.O.s (1993) and massage therapists (1994) from Office of
Alternative Medicine, NIH, Alternative Medicine: Expanding Medical Horizons,
NIH publication no. 94-066 (Washington: Government Printing Office, December
data for M.D.s (1992) from Martin Gonzalez, Socioeconomic Characteristics
of Medical Practice 1994 (Chicago: AMA, 1994); data for midwives (1995)
from Diana Korte, "Midwives on Trial," Mothering, (Fall 1995);
and data for N.P.s (1991) from Mullan et al., p. 145.
The estimated 3,000 health care practitioners who are licensed to use homeopathy include acupuncturists, chiropractors, dentists, naturopaths, nurse practitioners, osteopaths, physicians, physician assistants, and veterinarians.
Office of Alternative Medicine, National Institute of
Health, p. 82.
At a time when government is looking for ways to reduce
health spending, it should examine closely the supply side
of health care reform. Some experts have raised concerns
about an oversupply of highly trained 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. An overview of the current supply
of selected health care providers is presented in Table 1.
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
health costs and lack of access to primary and preventive
Individual Choice and Freedom to Contract
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, "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
Yet the freedom to contract--the right of individuals
to decide with whom and for what services they will dispose
of their earnings--is one of the fundamental rights of man.
As Chief Justice John Marshall said in Ogden v. Saunders,
"Individuals do not derive from government their right to
contract, but bring that right with them into society . . .
[e]very man retains [the right] to . . . dispose of [his]
property according to his own judgment." Indeed, legal
philosophers and ethicists, such as Roger Pilon, Richard
Epstein, and Stephen Mecado, convincingly argue that the
rights of property and contract are fundamental rights upon
which all others are based. 
Accordingly, 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, or other health care providers. Any restriction denies
Americans the right to make decisions about their own bodies.
The Rise of Medical Licensure
Although protection of the public is often cited as the
reason for medical licensing and limiting access to unconventional therapies, history indicates that professional
interest was more of an overriding concern in the early
enactment of those laws. The latter theory reflects economist Paul Feldstein's perspective that health associations
act like firms: they try to maximize the interests of their
existing membership. 
Medical licensure was first introduced in England in
1442 when London barbers were granted charters to perform
certain procedures. The charters authorized "barbers" to
treat wounds, let blood, and draw teeth. 
In the United States, the earliest health professional
licensure law was enacted by Virginia in 1639. That law
dealt with the collection of physician fees, vaccination,
the quarantine of certain diseases, and the construction and
management of isolation hospitals. Other early colonial
acts denied nonphysician practitioners any standing in civil
courts to collect fees. In 1760 New York City became the
first American jurisdiction to prohibit practice by unlicensed physicians. Subsequently, many other cities and
states introduced licensing requirements. 
During the early part of the 19th century, the United
States experienced an era known as "free trade in medicine."
A historical vignette in the Journal of the American Medical
Association explains that during the mid-1800s, botanics and
homeopathy were in great demand.  Those alternative health
practices were a powerful counterforce to regular medicine.
Most state licensure laws that granted special privileges to
physicians were repealed because of the widespread consumer
demand for botanicals. During the period, the United States
was one of the healthiest nations, with the world's lowest
infant mortality rate. 
However, the self-interest of physicians soon began to
assert itself. The repeal of licensure laws "triggered a
movement that led directly to the formation of the American
Medical Association."  The AMA was determined to protect
physicians from competition by nonphysician health care
providers. Consequently, licensure laws arose again, beginning about 1870. By 1895 nearly every state had created
some type of administrative board to examine and license
Another study of the early development of medical
licensing laws in the United States reports that the goals
of the AMA in supporting licensing appear to have been to:
(1) restrict entry into the profession and thereby secure a more stable financial climate for physicians,
(2) destroy for-profit medical schools and replace them with nonprofit institutions, and
(3) eliminate other medical sects such as homeopaths and chiropractors. 
History reveals that the AMA was influential in linking
physician licensure with strict educational standards that
(1) restricted entry into the health care marketplace and
(2) increased the cost of medical education. 
Paul Starr, in his Pulitzer prize-winning The Social
Transformation of American Medicine, examined the consolidation of medical authority between 1850 and 1930. Starr
notes that before 1870, requirements for physician training
were minimal and that many medical schools were for-profit. 
Medical education began to be reformed around the late
19th century. Starr describes the competitive climate of
the period: "Despite the new licensing laws, the ports of
entry into medicine were still wide open, and the unwelcome
passed through in great numbers. . . . From the viewpoint of
established physicians, the commercial schools were undesirable on at least two counts: for the added competition they were creating and for the low image of the physician that
their graduates fostered. Medicine would never be a respected profession--so its most vocal spokesman declared--until it sloughed off its coarse and common elements." 
In 1904 the AMA established a Council on Medical Education with a mandate to elevate the standards of medical education. Two years later the council inspected the 160
medical schools throughout the United States and approved of
only 82 schools: 46 were found imperfect, and 32 were declared "beyond salvage." But organized medicine's professional code of ethics "forbade physicians from taking up
cudgels against each other in public," and the report was
never published. 
Instead, the AMA commissioned an outside consultant to
investigate and report on the status of medical education in
the United States. Abraham Flexner of the Carnegie Foundation for the Advancement of Teaching was commissioned to do
a study of medical education. Flexner, an educator with a
bachelor's degree from Johns Hopkins, visited each of the
160 U.S. medical schools and released his recommendations in
Flexner decided that the great majority of medical
schools should be closed and the remainder should be modeled
after Johns Hopkins.  The AMA used the Flexner report in
its campaign to abolish medical schools outside its control.
With physician licensure already in place, it was relatively
easy for the AMA-dominated state examination boards to
consider only graduates of medical schools approved by the
AMA or the Association of American Colleges, whose lists
were identical. In many states the requirement was statutory. 
One result was a significant decline in the number of
proprietary schools, which had been very prominent until the
early 1900s. Although the number of medical colleges had
decreased from 160 to 131 between 1900 and 1910, the release
of the Flexner report facilitated the closure of an additional 46 medical schools between 1910 and 1920. 
By 1930 only 76 medical schools remained in the United
States. In 1932 the chairman of the Commission on Medical
Education -- Harvard University president A. Lawrence Lowell --
reported that "the definition of standards and the efforts
of leaders in the medical profession were very influential
in eliminating the proprietary and commercial medical
schools."  Lowell also concluded in the 1932 report on
medical education that "the budgets of many schools have
increased from 200 to 1,000 percent during the last 15
Women and African-Americans were disproportionately
affected by Flexner's recommendations. In 1905 and 1910
women medical students numbered 1,073 and 907, respectively.
Five years after the Flexner report was released, the number
of women medical students had been cut nearly in half--from
907 to 592.  Starr notes, "As places in medical school
became more scarce, schools that previously had liberal
policies toward women increasingly excluded them." 
There were seven predominantly black medical schools in
existence before the Flexner report, but only two remained
after its release.  As a result, the number of doctors
serving African-American communities declined. For example,
blacks in Mississippi had 1 doctor for every 14,634 persons  compared to 1 doctor for every 2,563 persons nationwide in 1930. 
Many small towns and rural communities were affected by
the new educational standards and associated licensure laws.
AMA president William Pusey concluded that "as you increase
the cost of the license to practice medicine you increase
the price at which medical service must be sold and you
correspondingly decrease the number of people who can afford
to buy this medical service." 
The Flexner report also had a significant impact on
nonphysician health care providers. Within 10 years after
the Flexner report, approximately 130 laws were passed
regulating at least 14 health-related occupations.  Some
nontraditional specialties were virtually wiped out. Take
homeopathy, for example. By the end of the 19th century, an
estimated 15 percent of physicians practiced homeopathy, the
use of natural remedies to stimulate the body's natural
healing responses. There were 22 homeopathic medical
schools and over 100 homeopathic hospitals in the United
States.  Early supporters of homeopathy included Thomas
Edison, John D. Rockefeller, and Mark Twain.  Four years
after the Flexner report, the president of the Institute of Homeopathy, Dr. DeWitt Wilcox, shared his perception of
The American Medical Association is fast degenerating into a political machine bent on throttling
everything which stands in its way for obtaining
medical supremacy. It has made an unholy alliance
with the Army and Navy Medical Departments, and
together they propose to own and control every
medical college in this country, all the State,
municipal and university hospitals, and get within
their grasp all the examining and licensing boards
in the United States. 
By the late 1930s the practice of homeopathy had largely disappeared from the United States. The new rating
system for medical schools was influential in eliminating
homeopathic colleges nationwide. 
It is commonly thought that homeopathy disappeared
because of its poor quality of education. But history shows
that physicians graduating from two of the last homeopathic
colleges -- Hahnemann Medical College and New York Homeopathic
College -- passed examinations at a rate comparable to physicians from schools that were maintained (see Table 2).
Graduates of Selected Medical Schools and Nationwide Total Examined by State Boards in 1931
||Percentage of Failures
|Albany Medical College
|Boston University School of Medicine
|Georgetown University School of
|Hahnemann Medical College and Hospital
|Howard University College of Medicine
|New York Homeopathic Medical College
and Flower Hospital
|Syracuse University College of Medicine
|Total examined nationwide and
percentage of failures
Source: A. Lawrence Lowell et al., Final Report of the Commission on Medical Education (New York: Association of American Medical Colleges, 1932), appendix, Table 87.
Medical Licensing Today
Today states use three mechanisms for regulating health
(1) licensure, the most restrictive form of regulation, makes it illegal to practice a profession without meeting state-imposed standards;
granting title protection to persons meeting predetermined standards (those without the title may perform services, but
may not use the title); and
(3) 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
United States. Feldstein has identified ways in which
health care associations limit competition: the first approach, Feldstein notes, is simply to have substitute providers declared illegal.  If substitute providers are
prohibited, or if they are severely limited in the tasks
they are legally permitted to perform, then 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 approach to limiting health care competition--
used when licensure and scope-of-practice restrictions
fail--is to restrict or limit substitute providers' services
from payment by government health programs. That approach
has been used by organized medicine, for example, 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 federal government's Agency for Health
Care Policy and Research recently released national guidelines 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.
At least 36 states restrict or outright prohibit the
practice of lay midwifery.  Consequently, only 5 percent
of all births are attended by midwives in this country, 
compared with 75 percent of all births in European coun-
tries.  Americans' low usage of midwifery does not corre-
late with high-quality birth outcomes: the United States has
the second highest caesarean rate in the world  and the
fifth highest infant mortality rate among Western industri-
alized nations. 
There are an estimated 10,000 midwives in this country
who fall into two categories: the certified nurse-midwife
and the lay midwife (or "direct-entry" 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.
Certified nurse-midwives represent approximately 4,000 of
the 10,000 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. But
unlike certified nurse midwives, 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 in the United States are attended by
lay midwives. 
Safety is most commonly 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.  For example, the National Birth Center study on
nearly 12,000 nonhospital births found a neonatal mortality
rate for midwife-assisted births comparable to that of
hospital births.  Another study examined 1,700 home births
attended by lay midwives in rural Tennessee. Researchers
found at-home midwife-assisted births to be as safe as
physician-attended hospital deliveries. 
Many people attribute midwives' record of success to
the fact that they do not assist with high-risk deliveries.
To address that issue, researchers excluded physicians'
high-risk cases from their study of lay midwives in rural
Tennessee. The American Journal of Public Health reports
that even with comparable low-risk deliveries, lay midwife-
assisted home births were as safe as physician-assisted
hospital births. Moreover, physician-attended hospitals
births were 10 times more likely to require intervention
(forceps, vacuum extractor, or caesarean section) than
midwife-assisted home births. 
Those findings are supported by international studies.
In the Netherlands--where more than 32 percent of births are
attended by lay midwives at home--research shows that the
perinatal mortality rate was lowest in cities that had the
highest proportion of home births.  A study on Dutch
births by the British journal Midwifery concluded that
perinatal mortality was "much lower under the noninterventionist care of midwives than under the interventionist
management of obstetricians." 
Midwives are considerably less expensive than traditional obstetric care providers. According to the Health
Insurance Association of America, the average physicianattended birth costs $4,200; Midwives Alliance of North
America reports that the average cost of a midwife-assisted
birth is $1,200.  Americans could save $2.4 billion annually if only 20 percent of American women increased their
access to midwives. 
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.  A study of the home birth
movement in the United States concludes, "Members have
chosen their alternative form of care not through faulty
understanding of medical principles and practices, but as a
result of active and reasoned disagreement with them. The
home birth movement is one of a number of lay health belief
systems currently flourishing among middle class populations." 
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 the expanded
use of midwives. 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. The benefits of a low-intervention
approach to childbirth are also supported by the General
Accounting Office and the Office of Technology Assessment. 
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.  A past president of the American College of Obstetrics and Gynecology (ACOG) denounced home
birth as a form of "maternal trauma" and "child abuse"
during the late 1970s.  A decade later, ACOG released
statements that "discouraged the use of birth centers until
better data were available." 
Midwives are continually placed under considerable
legal and biomedical scrutiny. An award-winning women's
health writer, Diana Korte, recently examined the number of
midwives on trial across the country. According to Korte,
at least 145 midwives in 36 states have had legal altercations with the medical authorities. One case involved the
arrest of a rural Missouri midwife.
At 2:00 a.m. on a January morning in 1991, seven
law enforcement officers in bulletproof vests ransacked the birth center of a rural Missouri midwife, removed all of her computer disks, and destroyed files and other materials. Although the
Missouri Nursing Board had previously authorized
the birth center, the county prosecutor charged
the midwife with eight felonies and several misdemeanors for practicing medicine without a license. 
Parents rarely make complaints about midwives: most
legal altercations stem from the medical community.  Archie Brodsky, a senior research associate at the Harvard
Medical School's Program in Psychiatry and the Law, noted
that 71 percent of obstetrician-gynecologists had been named
in one or more liability claims as of 1987. By comparison,
only 10 percent of midwives had experienced legal claims at
that time; lay midwives are even more rarely sued. 
The medical community often refuses to provide back-up
support to women who choose to deliver at home, despite
midwives' record of safety and low malpractice claims. A
recent pilot study of childbirth choices found that 20
percent of mothers delivering in the hospital setting would
have preferred a nonhospital delivery, but no 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, the study notes,
A number of women found it ironic, and even unconscionable, that physicians who criticized home
birth as unsafe also refused 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, however, that fear of malpractice
may have played a large part in the physicians' decisions to
refuse back-up support. Further, as Figure 1 illustrates,
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 include Alaska,
Arkansas, Arizona, Colorado, Florida, Louisiana, New Hampshire, New Mexico, Montana, Oregon, South Carolina, Texas,
Washington, and Wyoming. 
Legal Status of Direct-Entry Midwifery in the United States,
Particularly in underserved areas and long-term care
facilities, registered nurses with advanced training--nurse
practitioners--are able to provide most basic health servic
es provided by physicians, and at lower costs. The American
Nurses Association estimates that of the 2.1 million registered nurses nationwide, approximately 400,000 deliver
primary care.  Many of them are practicing in managed-care
organizations under the supervision of physicians. Some
21,000 nurses have received advanced training at graduate
schools of nursing and are licensed nurse practitioners.
Research shows that between 75 and 80 percent of adult
primary care, and up to 90 percent of pediatric primary
care, services could be safely provided by nurse practitioners.  A study by the Office of Technology Assessment
found that the outcomes of nurse practitioner care were
equivalent to those of services provided by physicians, and
that nurse practitioners were actually more adept in communication and preventive care. The Office of Technology
Assessment study also indicates that increasing access to
nurse practitioner services could be especially advantageous
for the home-bound elderly. 
Another study examined the outcomes of a nurse-managed
clinic that was opened to provide primary care services to
more than 2,000 low-income children and their families in an
underserved Texas community. Research shows that after the
clinic was opened in 1991, emergency room visits by pediatric Medicaid recipients decreased by 27 percent at the
largest emergency room in the county. In addition, the
pregnancy-induced hypertension rate was reduced from 7 to
3.3 percent over a three-year period, preventing costly
The economic loss from inefficient use of primary care
nurse practitioners is estimated to be between $6.4 billion
and $8.75 billion.  A meta-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 the cost of training physicians. 
Despite empirical evidence that nurse practitioners can safely provide primary care, many states impose scope-of-practice regulations that prevent nurses from practicing independently as primary care providers. Nurse practitioners derive their authority from various state nurse
practice acts.  However, 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.
Moreover, 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.
As of January 1995, only 10 states granted nurse practitioners the legal right to prescribe drugs independent of a physician.  Moreover, even some of those states limited
the independent nurse practitioner's prescription authority by law to 72 hours.  What that means for competition is that consumers--for example, elderly Medicare recipients who
live in rural areas--would have to visit independent nurse practitioners every three days to renew prescriptions. Barbara Safriet, associate dean of Yale Law School, argues,
Medical practice acts remain overly broad and indeterminate, with concomitant and unnecessary
restrictions in the licensure and practice acts of nonphysician providers. If we are to achieve our goal of offering high-quality care, at an affordable cost, to everyone who needs it, we must ensure that all health care providers are able to practice within the full scope of their profesional competencies. 
States' scope-of-practice regulations shield the full market demand for nurse practitioner services because nurses are not legally free to compete in the health care market. A 1993 Gallup poll found that 86 percent of consumers would be willing to use nurse practitioners for basic health care services. Only 12 percent stated that they would be unwilling to see a nurse practitioner. 
This analysis does not in any manner call for increased government regulations that would force Medicaid or Medicare recipients to substitute nurse practitioner care for physician services. Instead, it argues that Americans should not be restricted from choosing low-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
The chiropractic profession has faced significant challenges by organized medicine for over 100 years. For example, between 1963 and 1974 the AMA operated a Committee on Quackery with an intent to "expose the charlatanism of chiropractic." The AMA urged members to lend "their full
1support 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 soon 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 policy limits patient access to chiropractors this way: 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 perform x-rays in all 50 states.  That policy gives the medical profession control over managing back problems among elderly Americans.
Ironically, the federal government's Agency for Health Care Policy and Research (AHCPR) recently released national pain guidelines that recommend spinal manipulation for the
common complaint of acute low back pain.  It is estimated that 80 percent of all adults suffer from back pain at some time in their lives,  and an estimated 91 percent of older
adults (ages 65 to 74) report back problems.  The AHCPR estimates that Americans could save over $1 billion annually by using noninterventionist approaches for managing back pain, even if only 20 percent of practitioners followed the agency's recommendations. 
International research supports the U.S. findings that chiropractic is a safe and cost-effective method for managing back pain. A study published by the British Medical
Journal reports that chiropractic treatment was more effective than outpatient hospital management of low back pain. British researchers estimate that if the 72,000 patients who
show no contraindications to manipulation but are referred to hospitals for back care each year were instead referred to chiropractors, the British health system could reduce
days of sickness absence by 290,000 and could save 2.9 million pounds in social security payments over a two-year period. 
Consumers are quite satisfied with chiropractic treatment. The Western Journal of Medicine reports that patients of chiropractors were three times more likely than patients
of family physicians to report that they were very satisfied with their treatment for low back pain--by a score of 66 to 22 percent.  A 1991 Gallup poll found that 90 percent of
patients regard their chiropractic care as effective and that approximately 80 percent consider the treatment costs reasonable. 
In 1976 four chiropractors filed an antitrust lawsuit against the AMA, 5 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,
(2) defining it as unethical for MDs to accept referrals from chiropractors, and
(3) prohibiting chiropractors from using hospital diagnostic laboratory and radiological facilities, among other things.
In 1987 the AMA was found guilty of illegal conspiracy: the AMA's anti-quackery activity was in violation of U.S. antitrust laws,  yet restrictions on chiropractic scope of practice and reimbursement remain in place.
Vitamins and Herbs
For years mainstream medicine has suggested 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 (NCAHF), 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." 
Jarvis suggests that promoters of a free-enterprise
society are paving the way for organized quackery. He notes
that "in recent years, a free-market ideology, advanced by
Friedman in his book Free to Choose, has gained an influential following" and that "the only way to enjoy both the
benefits of a free-enterprise health marketplace and avoid
the abuses of quackery is to balance the situation with
sound consumer protection laws, enforcement, and education."  More recently, a member of NCAHF and president of
the Consumer Health Information Research Institute has
received a special citation from the FDA for combating
health fraud. 
One way the FDA combats health 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 have even been subject to
criminal prosecution. But getting herbal remedies through
the drug approval process is unrealistic. Botanicals are
not patentable (although they can be patented for use); and
the cost of their approval as drugs would be difficult to
recover. The total cost of taking a new drug to the market
in the United States is close to $400 million, and it takes
nearly 15 years to complete the procedure. 
Meanwhile, Americans are expressing an increased interest in nutritional and herbal therapies. And according to
the World Health Organization, about 4 billion people--80
percent of the world population--use herbal remedies for
some aspect of their health care. Yet in the United States
the FDA often considers herbal remedies to be worthless or
potentially dangerous. 
Health care regulators defend their position as necessary to protect consumers. But contrary to conventional
expectation, 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 are usually from
higher social classes.  A study of complementary medicine
in the United Kingdom suggests that patients from higher
social classes presumably have the opportunity to research
and explore the possibilities of complementary medicine and
to pay for it. 
Protecting Consumers or Limiting Competition?
There is little actual evidence that medical licensing
improves quality or protects the public.  Medical econo-
mist Gary Gaumer, reviewing all the available literature on
medical licensing, concluded,
Research evidence does not inspire confidence that
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 practice 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 increasing the quality of professionals'
Licensing laws may actually 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 all licensed
physicians to perform all types of medical services, even
those for which they are not specifically trained.  For
example, in Massachusetts physicians are licensed to perform
acupuncture even though they may not have received special
training.  That situation disturbs nonphysician acupuncturists who receive more hours of acupuncture training than
do most licensed physicians. 
Feldstein points out that licensure laws focus at the
point of entry into the medical profession, not on continu-
ous monitoring. Once medical professionals are licensed,
there are no requirements for proving that they are fully
trained to perform the most up-to-date procedures.  Some
states do not require continuing education, so there is no
guarantee that a physician is current with the most recent
techniques and information.  Feldstein points out that
state licensing boards are responsible for monitoring physicians' behavior and for penalizing
physicians whose performance is inadequate or
whose conduct is unethical. Unfortunately, this
approach for assuring physician quality and competence is completely inadequate. . . . Monitoring
the care provided by physicians through the use of
claims and medical records data would more directly determine the quality and competence of a physician. 
In his 1987 Cato Institute book, The Rule of Experts:
Occupational Licensing in America, S. David Young, a professor of accounting and finance at Tulane University, reviewed
the literature on a wide variety of occupational licensing
restrictions, including medical licensing, and found that
"licensing has, at best, a neutral effect on quality and may
even cause harm to consumers." 
While the public safety benefits of medical licensure
are clearly questionable, nearly all economists recognize
that professional licensure laws act as a barrier to entry
that decreases competition and increases price. As Victor
Fuchs wrote in 1974, "Most economists believe that part [of
physician's high incomes] represents a monopoly return to
physicians from restrictions on entry to the profession and
other barriers to competition." 
One of the earliest studies of the impact of licensure
on physician income was done in 1945 by Nobel Prize-winning
economist Milton Friedman and Simon Kuznets. Friedman and
Kuznets 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,
they concluded that the difference in mean income of physicians and dentists was caused by greater difficulty of entry
into medicine than into dentistry. 
Friedman and Kuznets's conclusions have been confirmed
by numerous other studies. For example, William White
examined the effect of licensure on the income of clinical
laboratory personnel and found that in cities with stringent
licensing restrictions income was 16 percent higher than in
cities with less stringent restrictions, with no variation
in the quality of testing. 
Lawrence Shepard examined the fees of dentists in
states that recognized out-of-state licenses and those that
did not. He found that in states that did not recognize
out-of-state licenses, dental fees were 12 to 15 percent
higher.  A study of Canadian health care indicated that
occupational licensing, combined with mobility restrictions
and advertising restrictions, increased health care costs by
as much as 27 percent.  Gaumer found that both fees and
provider incomes were higher in states with more restrictive
licensure requirements. 
Interesting confirmation that physician licensure is
related more to a desire to increase physician incomes than
to concern over public health and safety can be found in a
1984 study by medical economist Chris Paul, who found that
the year that a state enacted physician licensing was related to the number of AMA members in the state.  Paul concluded that decisions by states to require licensing of
physicians were more likely a result of special interests
than of the public interest.
As the Friedmans note, "The justification [for licensure] is always the same: to protect the consumer. However,
the reason is demonstrated by observing who lobbies at the
state legislatures for imposition or strengthening of licensure. The lobbyists are invariably representatives of the
occupation in question rather than its customers." 
Subsidies and the Medical Monopoly
In addition to using government to restrict competition, the medical monopoly also turns to government for
subsidies. For example, most physician training is subsidized by the federal government.
In 1927 student fees accounted for 34 percent of medical school revenues.  Today less than 5 percent of medical school revenues comes from tuition and fees. Instead,
medical schools rely heavily on federal and state support. 
In 1992 total medical school revenues amounted to
$23 billion.  State and local governments provided $2.7
billion.  The federal government paid at least $10.3
billion to medical schools and hospitals for medical education and training (Table 3). Additional revenues were
obtained from charges for services, endowments, and private
Taxpayer Support for Physician Education and Training, 1991-92
|Federal research, training,
|Federal research, training,
|State and local governments
Sources: Fitzhugh Mullan et al., "Doctors, Dollars,
and Determination: Making Physician Work-Force
Policy," Health Affairs Supplement (1993), p. 142;
and Janice Ganem et al., "Review of U.S. Medical
School Finances 1992-93," Journal of the American
Medical Association 274 (1995): 724.
Medicare payments to hospitals represent the largest
source of federal funding for medical education and training.  Medicare pays for physician education and training
in two ways: First, hospitals receive direct payments from
Medicare based on the number of full-time-equivalent residents employed at each hospital. Second, Medicare increases
a hospital's diagnostic-related group payments according to
an "indirect" medical education factor, based on the ratio
of residents to hospital beds. 
The average Medicare payment to hospitals was more than
$70,000 per resident for both direct and indirect education
subsidies in 1992. An estimated 69,900 full-time-equivalent
interns, residents, and fellows were eligible for Medicare
reimbursement in 1991. 
Medicare paid hospitals $1.6 billion for direct medical
education expenses and dispensed $3.6 billion for indirect
medical education adjustments in 1992.  Of the total $5.2
billion that Medicare paid to hospitals for training, approximately $0.3 billion was appropriated for training
nurses and allied health professionals. 
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) program. Federal funding for research,
training, and teaching amounted to at least $5.1 billion in
1992.  That money was awarded to medical schools and
affiliated hospitals in the form of grants and contracts.
Supporting biomedical research in medical schools is one way
the federal government supports medical education without
appearing to do so directly. 
As Feldstein has pointed out, "There is no reason why
medical students should be subsidized to a greater extent
than students in other graduate or professional schools." 
That point has also been suggested by Uwe Reinhardt, a
professor of political economy at Princeton University, who
In the context of academic medicine, this inquiry
should begin with the question of why the education of physicians is now so heavily supported
with public funds, when similar support has never
been extended to other important professions, for
example, students in law schools or graduate programs in business. . . . In truth, the case for
the traditional heavy public subsidies to medical
education and training has simply been taken for
granted . . . it never has been adequately justified. 
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. As already discussed, chiropractors and
other nontraditional providers have generally 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 in 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 American Hospital
As several medical economists studying the issue have
warned, in as much 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 other groups of providers by denying them
access to hospitals or influence within hospitals."
the medical monopoly is able to use federal funds to reward
its members and restrain its competitors.
What should government do if it is serious about cutting health spending and improving access to affordable
health care? The first step should be to eliminate the
anti-competitive barriers that restrict access to low-cost
providers, namely licensure laws and federal reimbursement
regulations. Americans should not be forced to substitute
providers against their will; rather, they should be free to
choose among all types of health care providers.
Instead of imposing strict licensure laws that focus on
entry into the market but do not guarantee quality control,
states should hold professionals equally accountable for the
quality of their outcomes. That will reduce the need for
strict licensure laws and other regulations that are purported to protect the public at large.
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 licensure laws and federal reimbursement regulations will provide meaningful health reform, increase consumer choice, and reduce health care costs.
© 1995 The Cato Institute
This study was supported, in part, by the Institute for
Humane Studies, George Mason University.
(1) For a detailed discussion of the demand side of health
care reform, see Stan Liebowitz, "Why Health Care Costs Too
Much," Cato Institute Policy Analysis no. 211, June 23,
(2) For a complete discussion of medical savings accounts,
see John C. Goodman and Gerald L. Musgrave, Patient Power:
Solving America's Health Care Crisis (Washington: Cato
(3) David Eisenberg et al., "Unconventional Medicine in the
United States: Prevalence, Costs, and Patterns of Use," New
England Journal of Medicine 328, no. 4 (1993): 246-52.
(4) Eisenberg et al. examined therapies not widely taught
in U.S. medical schools no generally available in U.S.
hospitals. Therapies included acupuncture, biofeedback,
chiropractic, commercial weight-loss programs, energy heal
ing, exercise, folk remedies, homeopathy, hypnosis, imagery,
lifestyle diets (e.g., macrobiotics), massage, megavitamin
therapy, prayer, relaxation techniques, self-help groups,
and spiritual healing.
(5) Daniel Q. Haney, "Study Finds Adults Pay $14 Billion
Annually on Offbeat Medicine," Philadelphia Inquirer, January 28, 1993, p. A6.
(6) Estimate based on amount spent out-of-pocket for all
physicians' services in 1990 = $23.5 billion, cited by
Eisenberg et al., p. 251; and total amount (out-of-pocket,
private insurance, and government) for all physicians'
services in 1990 = $140.5 billion, cited by Katharine R.
Levitt et al., "National Health Spending Trends, 1960-1993,"
Health Affairs (Winter 1994): 15.
(7) Office of Management and Budget, Standard Industrial
Classification Manual (Washington: National Technical Information Center, 1987). Nonphysician providers include acupuncturists, audiologists, chiropractors, Christian Science
practitioners, dental hygienists, dieticians, hypnotists,
inhalation therapists, midwives, naturopaths, nurses (not
practicing in hospitals, clinics, or offices of medical
doctors, nursing homes, HMOs, or home health care), nutritionists, occupational therapists, optometrists, paramedics,
physical therapists, physicians' assistants, podiatrists,
psychiatric social workers, psychologists, psychotherapists,
speech clinicians, and speech pathologists.
(8) U.S. Department of Commerce, Economics and Statistics
Administration, Bureau of the Census, 1992 Census of Service
Industries: Geographic Area Services, United States, publication no. SC92-A-52.
(9) Joseph Jacobs, "Building Bridges between Two Worlds:
The NIH's Office of Alternative Medicine," Academic Medicine
70 (January 1995): 41.
(10) Paul Brown, "Chiropractic: A Medical Perspective,"
Minnesota Medicine 77 (1994): 21; National Center for Health
Statistics, Health, United States, 1992, p. 149.
(11) Fitzhugh Mullan et al., "Doctors, Dollars, and Determination: Making Physician Work-Force Policy," Health Affairs,
Supplement 1993, pp. 138-51.
(12) Clark Havighurst, "The Changing Locus of Decision
Making in the Health Care Sector," Journal of Health Politics, Policy and Law 11 (1986): 700.
(13) See, for example, James Dorn and Henry Manne, eds.,
Economic Liberties and the Judiciary (Fairfax, Va.: George
Mason University Press, 1987).
(14) Paul J. Feldstein, Health Associations and the Demand
for Legislation (Cambridge, Mass.: Ballinger, 1977), p. 15.
(15) A. Lawrence Lowell et al., Final Report of the Commission on Medical Education (New York: Association of American
Medical Colleges, 1932), pp. 151-53.
(17) Lester S. King, "Medical Sects and Their Influence,"
Journal of the American Medical Association 248 (1982).
(18) Lawrence Wilson, "The Case against Medical Licensing,"
in The Dangers of Socialized Medicine, ed. Jacob Hornberger
and Richard Ebeling (Fairfax, Va.: Future of Freedom Foundation, 1994), p. 59.
(19) King, p. 1222.
(20) Lowell, p. 156.
(21) Ronald Hamowy, "The Early Development of Medical Licensing Laws in the United States, 1875-1900," Journal of
Libertarian Studies (1979).
(22) Reuben Kessel, "Price Discrimination in Medicine,"
Journal of Law and Economics 1 (1958): 20-53.
(23) Paul Starr, The Social Transformation of American
Medicine (New York: HarperCollins, 1982), pp. 79-144.
(24) Ibid., pp. 116-17.
(25) Ibid., p. 118.
(26) Flexner called for the adoption of five principles that
reflect the model of education developed at Johns Hopkins
University School of Medicine in 1893. Those include (1) a
minimum of two years of undergraduate college; (2) a four-
year curriculum, with two years in the basic medical scienc
es followed by two years of supervised clinical work in both
inpatient and outpatient hospital services; (3) regular
laboratory teaching exercises; (4) a high level of quality
instruction be maintained through the use of full-time
faculty; and (5) that medical schools be university based.
Anthony R. Kovner, Health Care Delivery in the United States
(New York: Springer, 1990), p. 73.
(27) A. R. Pruit, "The Medical Marketplace," in Politicized
Medicine (Irvington-on-Hudson, N.Y.: Foundation for Economic
Education, 1993), pp. 23-33; Milton Friedman and Rose Friedman, Free to Choose (New York: Harcourt, Brace, Jovanovich,
(28) Lowell, appendix, Table 104.
(29) Ibid., p. 11.
(30) Ibid., p. 283.
(31) Ibid., appendix, Table 116.
(32) Starr, p. 124.
(35) Estimate of 1 doctor per 2,563 persons nationwide based
on U.S. Census data, total U.S. population = 122,775,046 in
1930; and the total number of physicians in 1932 = 47,914.
Lowell, appendix, Tables 62, 63.
(36) Starr, p. 126.
(37) Charles Baron, "Licensure of Health Care Professionals:
The Consumer's Case for Abolition," American Journal of Law
and Medicine 9 (Fall 1983): 388.
(38) Office of Alternative Medicine, NIH, Alternative Medicine: Expanding Medical Horizons, NIH publication no. 94-066
(Washington: Government Printing Office, December 1994),
(39) Burton Goldberg, Alternative Medicine: The Definitive
Guide (Puyallup, Wash.: Future Medicine, 1993), p. 277.
(40) Editorial, "Medical Organizations in Annual Session:
The AMA Meeting," Journal of American Osteopathic Association 13 (1914): 650.
(41) Goldberg, p. 277.
(42) Pamela L. Brinegar and Kara L. Schmitt, "State Occupational and Professional Licensure," in The Book of States
(Lexington, Ky.: Council of State Governments, 1992),
(43) Paul J. Feldstein, The Politics of Health Legislation:
An Economic Perspective (Ann Arbor: Health Administration
Press, 1988), p. 81.
(44) Colleen Kochman, "Nurse Managed Clinics: Improving
Access to Health Care for Children," Invitation to Change:
Better Government Competition Winners, 1993 (Boston: Pioneer
Institute for Public Policy Research, 1993), pp. 3-22.
(45) Mark L. Schoene, "Federal Acute Back Pain Guideline
Recommends Medication, Spinal Manipulation, and Exercise:
Most Patients Can Safely Defer Specialized Diagnostic Test
ing," Back Letter 10 (January 1995): 1.
(46) Diana Korte, "Midwives on Trial," Mothering (Fall
(47) Stephanie J. Ventura et al., "Advance Report of Final
Natality Statistics, 1992," Monthly Vital Statistics Report:
Final Data from the Centers for Disease Control and Preven-
tion/National Center for Health Statistics 43 (October
(48) Chris Hafner-Eaton and Laurie Pearce, "Birth Choices,
the Law, and Medicine: Balancing Individual Freedoms and
Protection of the Public's Health," Journal of Health Poli-
tics, Policy and Law 19 (Winter 1994): 815.
(49) Francis Notzon et al., "International Differences in
the Use of Obstetric Interventions, Journal of the American
Medical Association 263 (1990): 3287.
(50) George Schieber et al., "Health System Performance in
OECD Countries, 1980-1992," Health Affairs (Fall 1994):
(51) Korte, p. 57.
(52) Ventura, p. 71.
(53) Hafner-Eaton, pp. 817-19.
(54) Judith Rooks et al., "Outcomes of Care in Birth Cen-
ters: The National Birth Center Study," New England Journal
of Medicine 321 (1989): 1804.
(55) A. Mark Durand, "The Safety of Home Birth: The Farm
Study," American Journal of Public Health 82 (March 1992):
(57) Hafner-Eaton, p. 818.
(58) Archie Brodsky, "Home Delivery," Reason, March 1992,
(59) Hafner-Eaton, p. 831.
(60) Estimate based on 20 percent of 4,065,000 births in
1992 and savings of $3,000 from midwife-assisted services.
Ventura et al.
(61) Bonnie B. O'Connor, "The Home Birth Movement in the
United States," Journal of Medicine and Philosophy 18
(62) Ibid., pp. 152, 171.
(63) Brodsky, p. 33.
(64) P. A. Stephenson and M. G. Wagner, "Reproductive Rights
and the Medical Care System: A Plea for Rational Health
Policy," Journal of Public Health Policy (Summer 1993):
(65) O'Connor, p. 167.
(66) Rooks, p. 1804.
(67) Korte, pp. 54-55.
(68) Ibid., p. 55.
(69) Brodsky, p. 32.
(70) Hafner-Eaton, p. 814
(71) O'Connor, p. 170.
(72) Korte, p. 57.
(73) Steve Sternberg, "Introducing--Dr. Nurse," Atlanta
Journal/Atlantic Constitution, August 15, 1993.
(74) Kochman, p. 8.
(75) Office of Technology Assessment, Nurse Practitioners,
Physician Assistants, and Certified Nurse-Midwives, Health
Technology Case Study 37, OTA-HCS-37 (Washington: U.S.
Government Printing Office, December 1986), pp. 5-10.
(76) Kochman, p. 11; P. Capan et al., "Nurse-Managed Clinics
Provide Access and Improved Health Care," Nurse Practitioner
18 (1993): 53-55.
(77) Len M. Nichols, "Estimating Costs of Underusing Advanced Practice Nurses," Nursing Economics 10 (September-October 1994): 350.
(78) Kochman, p. 9.
(79) Barbara Safriet, "Health Care Dollars and Regulatory
Sense: The Role of Advanced Practice Nursing," Yale Journal
on Regulation 9 (1992): 437.
(80) J. W. Gilliam II, "A Contemporary Analysis of Medico-
legal Concerns for Physician Assistants and Nurse Practitioners," Legal Medicine (1994): 133-80.
(81) Jurisdictions that grant nurse practitioners prescriptive authority independent of physicians include Alaska,
Arizona, Iowa, Montana, New Mexico, Oregon, Vermont, Wisconsin, Wyoming, and the District of Columbia. Linda J. Pearson, "Annual Update of How Each State Stands on Legislative
Issues Affecting Advanced Nursing Practice," Nurse Practitioner 20 (1995): 16.
(82) Linda Minich, American Nurses Association, Washington,
Personal communication, September 1995.
(83) Barbara Safriet, "Impediments to Progress in Health
Care Workforce Policy: License and Practice Laws," Inquiry
31 (1994): 310-17.
(84) Candice Owley, "Broadside against Nurses," Washington
Post, December 27, 1993.
(85) American Medical Association, Digest of Official Actions, 1959-1968 (Chicago: AMA, 1971), pp. 334-36; "Quackery
Persists," editorial, Journal of the American Medical Association 221 (1972): 914.
(86) "Chiropractic Scope of Practice," American Chiropractic
Association, Washington, March 1993.
(87) American Medical Association, Digest of Official Actions: 1969-1978 (Chicago: American Medical Association,
1980), p. 248.
(88) American Chiropractic Association, Arlington, Va.,
Personal communication, September 1995.
(89) Schoene, p. 1.
(90) Daniel Cherkin et al., "Patient Evaluations of Low Back
Pain Care from Family Physicians and Chiropractors," Western
Journal of Medicine 150 (1989): 351.
(91) Robin A. Cohen et al., "Trends in the Health of Older
Americans: United States, 1994," Vital and Health Statistics
from the Centers for Disease Control and Prevention/National
Center for Health Statistics, series 3, no. 30 (April 1995):
(92) Richard A. Knox, "Agency on Medical Cost-Effectiveness
Fighting for Life," Boston Globe, July 23, 1995, p. 16.
(93) T. W. Meade et al., "Low Back Pain of Mechanical Origin: Randomized Comparison of Chiropractic and Hospital
Patient Treatment," British Medical Journal 300 (1990):
(94) Cherkin, p. 351.
(95) Richard Leviton, "Hands on the Back May Be the Best
Treatment, Says U.S. Government Study," Alternative Medicine
Digest 1 (1995): 33.
(96) Brown, pp. 21-25; Editor, ACA Journal of Chiropractic,
American Medical Association Issues Revised Ethics Opinion
on Chiropractic as Litigation on Antitrust Suit Is Concluded
(Arlington, Va.: American Chiropractic Association, 1992).
(97) See, for example, Julian B. Roebuck and Bruce Hunter,
"The Awareness of Health-Care Quackery as Deviant Behavior,"
Journal of Health and Social Behavior 13 (1972): 166; James
H. Young, "The Persistence of Medical Quackery in America,"
American Scientist 60 (1972): 324; Lois D. McBean et al.,
"Food Faddism: A Challenge to Nutritionists and Dietitians,"
American Journal of Clinical Nutrition 27 (1974): 1071-78;
Faith T. Fitzgerald, "Science and Scam: Alternative Thought
Patterns in Alternative Health Care," New England Journal of
Medicine 309 (1983): 1066; Marc Galanter, "Cults and Zealous Self-Help Movements: A Psychiatric Perspective," American Journal of Psychiatry 147 (1990): 543-51; Andrew A.
Skolnick, "FDA Petitioned to 'Stop Homeopathy Scam,'" Journal of the American Medical Association 272 (1994): 1154-56;
Thomas L. Delbanco, "Bitter Herbs: Mainstream, Magic, and
Menace," Annals of Internal Medicine 121 (1994): 803-4.
(98) William T. Jarvis, "Quackery: A National Scandal,"
Clinical Chemistry 38 (1992): 1574-86.
(99) Ibid., p. 1575.
(100) Tim Beardsley, "Fads and Feds: Holistic Therapy Collides with Reductionist Science," Scientific American (September 1993): 39-44.
(101) Thomas M. Lenard et al., Interim Report: The Future of
Medical Innovation (Washington: Progress and Freedom Foundation, 1995), p. 7.
(102) Office of Alternative Medicine, pp. 183-206.
(103) K. Danner Clouser and David Hufford, "Nonorthodox
Healing Systems and Their Knowledge Claims," Journal of
Medicine and Philosophy 18 (1993): 102; David J. Hufford,
"Epistemologies in Religious Healing," Journal of Medicine
and Philosophy 18 (1993): 175-94.
(104) Stephen Fulder and Robin Munro, "Complementary Medicine
in the United Kingdom: Patients, Practitioners, and Consultations," Lancet (1985): 542; Mathilde Boissett and Mary-Ann
Fitzcharles, "Alternative Medicine Use by Rheumatology
Patients in a Universal Health Care Setting," Journal of
Rheumatology 21 (1994): 148.
(105) Fulder and Munro, p. 542.
(106) See, for example, Sidney Carroll and Robert Gaston,
"Occupational Licensing and the Quality of Service: An
Overview," Law and Human Behavior, September 1983.
(107) Gary Gaumer, "Regulating Health Professionals: A Review
of Empirical Literature," Milbank Memorial Fund Quarterly
(108) Carolyn Cox and Susan Foster, "The Costs and Benefits
of Occupational Regulation," Federal Trade Commission,
(109) Terree Wasley, What Has Government Done to Our Health
Care? (Washington: Cato Institute, 1992).
(110) The Commonwealth of Massachusetts's Acupuncture Statute
(M.G.L. c, 112 ss. 148-62) states that "nothing contained
herein shall prevent licensed physicians from practicing
(111) Judy Foreman, "Acupuncture: An Ancient Medicine Is
Making Its Point," Boston Globe, May 22, 1995, p. 25.
Foreman reports that the national organization for physician-acupuncturists (American Academy of Medical Acupuncture) requires 200 hours of acupuncture training for member
ship. The national organization for nonphysician-acupuncturists (National Commission for the Certification of Acupuncturists) requires more than 1,000 hours of acupuncture
training before candidates take the exam for national certification.
(112) Paul J. Feldstein, Health Policy Issues: An Economic
Perspective on Health Reform (Ann Arbor: Health Administration Press, 1994), p. 189.
(113) Wasley, p. 42.
(114) Feldstein, Health Policy Issues, pp. 189-90.
(115) S. David Young, The Rule of Experts: Occupational
Licensing in America (Washington: Cato Institute, 1987),
(116) Victor Fuchs, Who Shall Live? (New York: Basic Books,
1974), p. 20.
(117) Milton Friedman and Simon Kuznets, Income from Independent Professional Practice (New York: National Bureau of
Economic Research, 1945).
(118) William White, "The Impact of Occupational Licensure on
Clinical Laboratory Personnel," Journal of Human Resources
(119) Lawrence Shepard, "Licensing Restrictions and the Cost
of Dental Care," Journal of Law and Economics (April 1978).
(120) Timothy Muzondo and Pazderka Bohumir, "Occupational
Licensing and Professional Incomes in Canada," Canadian
Journal of Economics (November 1990).
(121) Gaumer, p. 397.
(122) Chris Paul, "Physician Licensure and the Quality of
Medical Care," Atlantic Economic Journal 12 (1984): 18-30.
(123) Friedman and Friedman, p. 240. Emphasis in original.
(124) Medical school revenues totaled $11,983,863 in 1932.
Sources of income were as follows: student fees,
$4,057,304; endowment income, $2,784,527; state and city,
$2,574,973; and other, $2,567,059. Lowell et al., Table 104
and p. 283.
(125) Uwe Reinhardt, "Planning the Nation's Health Workforce:
Let the Market In," Inquiry 31 (Fall 1994): 250-63; Janice
L. Ganem et al., "Review of US Medical School Finances,
1993-1994," Journal of the American Medical Association 274
(September 6, 1995): 724, Table 1.
(126) Janice L. Ganem et al., "Review of U.S. Medical School
Finances," Journal of the American Medical Association 274
(127) Mullan et al., p. 142.
(128) Congressional Budget Office, Medicare and Graduate
Medical Education (Washington: Government Printing Office,
1995), p. 10.
(130) Mullan et al., p. 143.
(132) Ibid., pp. 142-43.
(133) Ganem, p. 724, Table 1.
(134) Kovner, p. 73.
(135) Feldstein, Health Policy Issues, p. 189.
(136) Reinhardt, pp. 253-54.
(137) "Prized by Hospitals, Accreditation Hides Perils Patients Face," Wall Street Journal, October 12, 1988.
(138) Sherman Follard, Allen Goodman, and Miran Stano, The
Economics of Health and Health Care (New York, Macmillan,
1993), p. 583.
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