Recent studies of occupational licensing have shown the influence of licensing when regulations are introduced or become more stringent. The objective of this study is to examine the influence of occupational regulations on wages, employment, and prices when regulations are changed in ways that alter the boundaries and shared work space between two occupations, namely nurse practioners and physicians. We examine a variety of data sources to shed light on the apparent effects of recent changes in nurse practitioner scope of practice regulations on several different outcomes of interest.
Our empirical work shows that regulations that require nurse practitioners to be supervised by physicans when prescribing controlled substances reduce nurse practitioners wages by about 14 percent and increase MD wages by about 7 percent. We also find that restrictions on prescription authority lead to a reduction in hours worked by nurse practitioners of between 6 and 14 percent per year. Depending on the empirical model used in the estimation, the regulations also increase physician hours worked by 6 to 9 percent per year. We then turn to insurance claims data to study the effects of nurse practitioners scope of practice regulations on the prevailing transaction prices associated with child well-care visits, which represent a useful test case because child well care visits represent a service that could easily be performed by either nurse practitioners or an MD. We find that limits on nurse practitioners prescription authority increases the price of well-child visits by 3 to 16 percent. Another important issue that is important to study is whether nurse practitioners scope of practice regulation protects population health in meaningful ways. We study this issue in two ways. First, we asked whether changes in nurse practitioners scope of practice regulation led to any changes in malpractice premiums. Such a change might be expected if altering the supervisory relationship between nurse practitioners and MDs and providing nurse practitioners with expanded prescription authority increased the likelihood of lawsuits associated with medical practice errors. Second, we studied whether the regulations affected infant mortality rates, which would provide a crude measure of whether nurse practitioners practice freedoms lead to large changes in the quality of care received by pregnant women and infants. We found no evidence that the regulations had any effect on either malpractice premiums or infant mortality rates. Overall, our empirical analysis suggests that more restrictive nurse practitioners scope of practice regulations changes the wage and employment patterns associated with the production of health services, increases the price of basic medical care, and does not appear to influence health care quality in ways that are large enough to affect infant mortality rates or malpractice premiums.
Posted by Morris Kleiner, Professor and AFL-CIO Chair, Director of Graduate Studies, Graduate Certificate in Policy Issues on Work and Play, at the University of Minnesota's Humphrey School of Public Affairs. Kleiner is also a research associate with the National Bureau of Economic Research. He has been a Professor at the University of Kansas, an associate in employment policy with the Brookings Institution, a visiting scholar in the Harvard University economics department, a visiting researcher in the Industrial Relations Section at Princeton University, and a research fellow at the London School of Economics. He is currently also serving as a Visiting Scholar in the economic research department at the Federal Reserve Bank of Minneapolis. He received a doctorate in economics from the University of Illinois.
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