Devolution in Reverse


Editor of Professional Licensing Report

Licensing is often depicted as a struggle between the sovereign states on the one hand and professional associations on the other, with consumers caught somewhere in between. But recently the rules of warfare have been altered by the growing corporate stakes in health care, among other factors. A reform like interstate mobility for professionals once looked like a long-term project of infinite complexity. Now, just as suddenly as the two Germanys reunited, it may be occurring with sizzling speed.

Nursing boards made a landmark decision in August by agreeing that there shouldn't be that much difference between professional licenses and driver's licenses. At their annual meeting, delegates of the National Council of State Boards of Nursing were unanimous in endorsing a "mutual recognition" model of nursing regulation. In effect, NCSBN said, it will work toward an interstate compact, under which nurses would hold a license in one state and be able to practice in any state, provided they follow the laws and regulations of the state in which they practice.

The boards were correct in viewing the agreement as revolutionary, even a millennial event--not just for nursing but for all professions. Throughout this century, a Balkanized scheme of professional regulation has prevailed, and it has had an interesting effect: it has vested apparent control in state governments, while leaving actual control to the professions themselves. Whether they wanted to raise entry standards or expand their practice, they could count on one thing: their core opposition would never be from state legislators but from competing professions.

Of course, sometimes they go too far, and find states reacting with alarm to having decisions taken out of their hands. The recent steep increase in examination fees for the architect exam yielded an example. After the National Council of Architectural Registration Boards computerized its exam this year, candidates could take the test any of six days a week, during the day or after hours at 220 test centers, and state boards would receive the results in a week.

The downside was the price. In Texas, the architecture board went to the legislature to raise the exam fee from $545 to $1,020. What they got from appalled lawmakers instead was an amendment prohibiting Texas students from taking the exam at that price. The board is now required to conduct the exam twice a year but to charge no more than $525 for it. As a result, Texas candidates can only take up to five sections of the test in a year, for the time being. But most observers expect that eventually Texas will give in to the inevitable.

The states' resistance to the free practice of telemedicine may follow the same path. In several states, laws have been recently passed mandating that anyone offering medical services, whether in person or by modem, must be licensed in the state where the patient is located. Much of the new legislative activity is in the nature of a backlash. For example, Texas had a liberal exemption for physicians who entered the state for consultative purposes, then two years ago it expressly limited the exemption to episodic consultation. (A progressive exception so far: California?s Telemedicine Development Act of 1996, which specifies that out-of state physicians can consult with a California physician without having a California license as long as they don't have ultimate authority over the patient's care.)

The Mayo Foundation points out that curbs on telemedicine could backfire. In a recent letter to the federal government, the foundation said, "Advocates of licensing restrictions for telemedicine consultations often express concern that telemedicine could give rise to commercial 'store-front' operations which have physicians available only through electronic means. Ironically, however, small commercial operations structured to provide low-cost, high-volume, multi-state service will be able to accommodate licensure requirements much more easily than physicians whose practices are not focused on telemedicine. Licensure barriers will put high-quality providers at a competitive disadvantage and promote the types of practices that barrier proponents profess to fear."

The stakes in telemedicine are not small. A study by the US General Accounting Office found that federal agencies invested well over half a billion dollars in telemedicine projects in the last two years, mostly through the Defense Department. The Medicare Telemedicine Demonstration project, which is scheduled to run through September 1999, is being conducted in Georgia, Iowa, North Carolina, and West Virginia, but without interstate links because of licensing issues.

That restriction is unlikely to last. On the one hand, it is tough to challenge the concept of local standards and local control. But where so much money is involved, theoretical principles have a way of taking a back seat. That's why Dave Swankin, president of the Citizen Advocacy Center in Washington DC, contends that telemedicine foes are not being realistic. Fending off interstate practice of this kind with licensing laws, he says, is "like lying in front of a tank in Czechoslovakia."

For a combination of reasons, many of licensing's regulatory structures have become obsolete. A useful comparison can be made between the professions and satellite dishes. Back when satellite dishes were the size of hot tubs, it was a standard covenant of homeowners' associations to ban the devices entirely, since so many people considered them unsightly. But when technology shrank the size of the dishes to 18 inches a few years ago, and consumers began pushing to install them on their property, thousands of homeowners' associations realized their ban on satellite dishes was too broadly written. Most associations were stuck with it, because of the difficulty of getting a supermajority of the community to agree to change it.

Then along came the Telecommunications Act of 1996. Among its provisions was a law overriding the association covenants: it prevented the prohibition of satellite dishes less than one meter in diameter. Thus at one fell swoop, a federal law lifted thousands of local regulatory restrictions in communities across the country.

Unlike satellite dishes, the professions aren't shrinking. But the laws that govern them, in many cases, could soon be swept aside.