Via Jesse Walker comes a terrific paper (pdf) by Cato’s Shirley Svorny, explaining how state-sponsored medical licensure drives health care costs up and accessibility down, while doing very little on its own to protect patients from incompetent physicians. Money quote:

Groups representing mid-level professionals are currently threatening to erode what little workforce flexibility exists. Like physicians in the early part of the 20th century, lobbying groups of mid-level clinicians are working to secure legislation that would allow them to stake a claim to specific areas of practice, excluding all others from providing services in those areas. In addition, many clinician groups are lobbying to increase education requirements for new entrants to their field. When government issues licenses to medical professionals, it creates a regulatory apparatus that organized clinicians can manipulate to increase their incomes.

And again:

According to Dr. Derek van Amerongen,Chief Medical Officer of Humana Health Plans of Ohio and Indiana: “People and the legislatures read way too much into licenses. They are extremely poor proxies for quality and knowledge.” Oversight of medical professionals by state medical boards is at best redundant to those quality protections provided by courts and market processes. Because licensing reduces access to care and may give consumers a false sense of security, it may in fact do more harm than good.If there were no state licensing of medical professionals, consumers would search more and demand more information, as they do with other goods.

Importance of this issue? Pretty damn huge, as Kevin Carson and Roderick Long have argued in considerable detail over at AOTP. Chances of anything serious being done about it? Pretty much zero, though Svorny does suggest some compromise strategies:

If eliminating licensing is politically infeasible, some preliminary steps might be generally acceptable. States could immediately increase workforce mobility by recognizing clinician licenses issued by other states, or Congress could require states to do so. For midlevel clinicians, such as physician assistants, physical therapists, and audiologists, eliminating education requirements beyond an initial degree (say a bachelors’ degree) would let employers and consumers select the appropriate level of expertise. At the very least, state legislators should be alert to the self-interest of medical professional organizations that may lie behind the licensing proposals brought to the legislature for approval. When physician groups insist that changes in scope of practice be contingent upon evidence of improved outcomes, politicians should remember that, at present, there is no basis for the claim that patient safety is assured under the current system (an artificial construct of past legislative action) or the claim that patients are at greater risk when state regulation is relaxed.

I for one am very much looking forward to having Kevin weigh in …