The Demand for Healthcare Regulation: The Effect of Political Spending on Occupational Licensing Laws

Abstract

Using data on political spending in state elections, this study considers the role of political contributions by healthcare professional interest groups in states' decisions to enact occupational licensing laws. These laws govern how different professions may operate in healthcare markets, and while they ostensibly exist to protect consumers, licensing laws can also insulate professionals from competition in healthcare markets. Higher political spending by physician interest groups increases the probability that a state maintains licensing laws restricting the practices of nurse practitioners (NPs) and physician assistants (PAs). Conversely, increased spending by hospital interest groups increases the probability that a state allows NPs and PAs to practice with more autonomy. Nurse groups, which include groups affiliated with NPs, have a smaller effect on licensing laws. And nonphysician groups, which include groups affiliated with PAs, have almost no effect on licensing laws. These results are consistent with the investment theory of political spending.

Beyond Physicians: The Effect of Licensing and Liability Laws on the Supply of Nurse Practitioners and Physician Assistants

“…Prior work suggests that NP and PA licensing laws respond to changes in political spending by interest groups connected to physicians and hospitals, with groups connected to NPs playing a small role (McMichael ). The evidence further suggests that political spending is driven by factors other than the size of the professions that are connected to interest groups, that is, provider supply does not drive political spending (McMichael ).…”

“…Prior work suggests that NP and PA licensing laws respond to changes in political spending by interest groups connected to physicians and hospitals, with groups connected to NPs playing a small role (McMichael ). The evidence further suggests that political spending is driven by factors other than the size of the professions that are connected to interest groups, that is, provider supply does not drive political spending (McMichael ). Other investigations into the causes of changes to licensing laws have similarly suggested that lobbying and other political efforts are primarily responsible (see Traczynski & Udalova ; Safriet ; Isaacs & Jellinek ).…”

“…For a more complete discussion of the potential effects of NC Board going forward, see Allensworth (). For a discussion of the political factors that influence NP and PA licensing laws, see McMichael ().…”

Beyond Physicians: The Effect of Licensing and Liability Laws on the Supply of Nurse Practitioners and Physician Assistants

“…Prior work suggests that NP and PA licensing laws respond to changes in political spending by interest groups connected to physicians and hospitals, with groups connected to NPs playing a small role (McMichael 2017). The evidence further suggests that political spending is driven by factors other than the size of the professions that are connected to interest groups, that is, provider supply does not drive political spending (McMichael 2017). Other investigations into the causes of changes to licensing laws have similarly suggested that lobbying and other political efforts are primarily responsible (see Traczynski & Udalova 2018;Safriet 2002;Isaacs & Jellinek 2013).…”

“…For a more complete discussion of the potential effects of NC Board going forward, see Allensworth (2017). For a discussion of the political factors that influence NP and PA licensing laws, see McMichael (2017).…”