The Medical Monopoly:
Your Tax Dollars Limit the Competition
By Richard Leviton
Medical licensing laws and federal reimbursement programs
severely limit open competition among medical modalities
and keep the cost of American health care exorbitant,
states medical analyst Sue Blevins in a policy analysis from the Cato Institute
of Washington, D.C.
Ever since their introduction in the 1870s, licensing
laws have limited the supply of health care providers,
thereby limiting competition and increasing doctor's incomes,
Blevins explains. Government policies, which strongly
favor (and reward) conventional medicine, are largely
responsible for the escalation of health care costs and
the lack of a wide range of choices in medical services.
In addition, there is "little actual evidence that medical
licensing improves quality [of care] or protects the public,"
says Blevins. The result is a "government-imposed medical
monopoly," supported by the tax dollars of all Americans,
including the 33% who consult alternative practitioners.
Consider how licensing regulations restrict the public's
access to nonphysician health care providers, such as
midwives. There are 10,000 [lay] midwives in the U.S.,
but 36 states either restrict or prohibit their activities.
"American's low usage of midwifery does not correlate
with high quality birth outcomes," Blevins says, because
the U.S. has the fifth highest infant mortality rate among
industrialized nations. Midwife-assisted births could
save Americans $2.4 billion annually if only 20% of women
Nurse practitioners are another case in point. These
are registered nurses (R.N.s) with advanced training.
Research indicates that almost 80% of adult primary care
and about 90% of child care services could be safely provided
by nurse practitioners. A 1993 Gallup poll reported that
86% of consumers would willingly use nurse practitioners
for all their basic medical services.
Further, we could be saving between $6.4 and $8.75 billion
a year if nurse practitioners were more widely used. But
they're not because "many states impose scope-of-practice
regulations that prevent nurses from practicing independently
as primary care providers," says Blevins. This action
suppresses the full potential demand for them because
they are not legally free to compete.
Whether you like it or not, your tax dollars directly
subsidize conventional medical schools, but not alternative
schools such as chiropractic or naturopathic colleges,
says Blevins. Today, only 5% of medical school income
comes from tuition and fees; the [majority of ] the rest
comes from state and federal government subsidies. Of
the $23 billion U.S. medical schools received in 1992,
$2.7 billion came from state and local governments, and
$10.3 billion came from the federal government.
Your tax dollars support the medical monopoly through
other means, too, such as research, training, and teaching
grants from agencies such as the National Institutes of
Health, and Medicare and Medicaid reimbursements, which
cover only conventional medicine, Blevins says.
The time for reform is at hand, urges Blevins. Even
if you do not particularly favor alternative medicine,
she argues, the medical monopoly goes against the capitalist
grain of free, unrestricted, nonmonopolistic competition
in the marketplace. We haven't seen that for over 125
years when it comes to medicine in this country. "Breaking
the anti-competitive barriers of licensing laws and federal
reimbursement regulations will provide meaningful health
reform, increase consumer choice, and reduce health care
costs," states Blevins.
This article was originally published in Alternative
Medicine Digest, Issue 11, April 1996.