Professional Licensing

Free Market Solution Expands Access to Care

Health Care

Harmful regulations prevent Pennsylvania’s nurse practitioners—highly-trained medical professionals who interpret diagnostic tests, treat chronic conditions, and prescribe medication—from doing what they do best: providing quality health care for patients in need.

State law currently requires nurse practitioners to enter into expensive contracts, called collaborative agreements, with two physicians. These contracts cost nurse practitioners up to $25,000 per year, but they do not serve the public interest. They do not improve the quality of care for patients. And they do not promote health care access.

Collaborative agreements simply serve as barriers for nurse practitioners to enter the marketplace.

Earlier this week, hundreds of nurse practitioners gathered in Harrisburg to lobby for full practice authority—which would allow them to practice without expensive collaborative agreements. HB 765, sponsored by Rep. Topper, and SB 717, sponsored by Sen. Vance, would make Pennsylvania the 22nd state to grant full practice authority.

An amendment recently offered by Sen. Boscola establishes full practice authority after nurse practitioners first abide by collaborative agreements for 3 years and 3600 hours. This compromise was endorsed by the Hospital and Healthsystem Association, which clears an important legislative hurdle.

These bills present an incredible opportunity to lower prices, increase access, and sustain high quality medical care. Every study conducted about nurse practitioners demonstrates they achieve equal or better patient health outcomes

Care provided by nurse practitioners is not only equal in quality, it is less expensive. Since Medicaid reimburses at lower rates for nurse practitioners than physicians, full practice authority will save taxpayer dollars—unlike many other state-funded health care proposals which rely on higher taxes.

Most importantly, full practice authority is a triumph for health care in rural or underserved areas—since these are precisely the areas where collaborating physicians are hard to find. The bills championed by Rep. Topper and Sen. Vance, which currently sit in committee, will increase access to high quality care without costing taxpayers a dime—the epitome of free market health care.

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posted by James Paul | 09:47 AM

How Ridesharing Helps the Poor and Disabled

Earlier this week, I used Uber to get a ride in downtown Philadelphia. Curious, I asked my driver how long he’d been driving for Uber. “Two years,” he told me, noting that he used to drive a taxi. “I’m so much better off now,” he added.

This flies in the face of criticism that Uber and other ridesharing services—despite the numerous benefits they offer—harm taxi drivers.

Just yesterday, the Public Utility Commission (PUC) issued an $11 million fine on Uber (which will certainly be appealed in court). The fine stemmed for Uber operating without PUC approval, not from any harm to riders or threat to public safety.

In fact, several recent news stories highlight the many beneficiaries of ridesharing.

  • A recent Pittsburgh Post-Gazette story looks at how Uber, Lyft, and zTrip have increased transportation options to underserved neighborhoods in Pittsburgh.
  • Similarly, a story shows the expanded economic opportunity generated by Uber and Lyft in Philadelphia.
  • The benefits extend beyond simply serving neighborhoods taxis don’t. A CBS Pittsburgh story explains how drunk-driving has declined in the city thanks to ridesharing services.
  • Another beneficiary of ridesharing has been disabled riders. An AP analysis looks at how major cities have utilized Uber and Lyft to provide transportation for residents with disabilities. Indeed, transit systems have actually saved money by using a voucher system to cover the fares of Uber and Lyft.

Certain special interests have thrown significant funds and manpower behind efforts to prevent Lyft and Uber from operating in the city. This would be most unfortunate for low-income residents of Philadelphia.

Emails uncovered by the Philadelphia Inquirer reveal the Philadelphia Parking Authority has conspired with the taxi industry to protect them from competition—at the expense of consumers.

Clearly, the PPA’s opposition to ridesharing services is about preserving its authority and regulatory powers. It has little to do with protecting consumers. Indeed, a study from the Cato Institute highlights that ridesharing services ultimately provide greater safety than taxis.

Given the need and numerous benefits of ridesharing, lawmakers should pass legislation authorizing ridesharing across the state, including Philadelphia.

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posted by Nathan Benefield | 10:12 AM

Improving Health Care Access While Cutting Costs

Health Care

Is it possible to improve health care access while also cutting a costs? Yes—according to a recent study by Edward Timmons of the Mercatus Center.

Writing in U.S. News and World Report, Timmons explains that expanding the scope of practice for physician assistants and nurse practitioners can significantly reduce health costs and Medicaid expenditures:

Utilizing Medicaid claims data, I find evidence that an expanded scope of practice is indeed associated with lower health care costs. More specifically, the cost of outpatient claims per Medicaid beneficiary is about 11 percent lower in states where physician assistants are permitted to prescribe drugs.

Occupational licenses, which vary from state to state, define the scope of practice—or services a health care worker can provide to patients. Because Medicaid reimbursement rates are lower for physician assistants and nurse practitioners, expanding their scope of practice results in significant cost savings for state government.

In Pennsylvania, physician assistants are permitted to prescribe controlled substances, but nurse practitioners are required to prescribe under the direct supervision of a physician. Timmons suggests that services exclusively left to doctors are not worth the costs:

While it makes sense that only a brain surgeon should perform brain surgery, some of these laws appear to exist predominantly for medical doctors to preserve their market share. Although there are a number of factors contributing to rising health care costs, turf wars between competing health care providers are certainly not improving the situation.

Importantly, the study finds that expanding scope of practice will not reduce health quality. 

Lorraine Bock, president of the Pennsylvania Coalition of Nurse Practitioners, describes how patients are the ones who suffer from the status-quo:

A few years ago, a nurse practitioner from Venango County drafted a letter to her patients. “I am sorry this is happening,” she wrote. “I have enjoyed your friendship and trust. We have become friends over the years and I will treasure these times forever.”

After 10 years, she had to break the news that her rural Oil City practice was closing its doors. Not because she wasn’t seeing enough patients. To the contrary, her willingness to waive co-pays for low-income patients meant that her waiting room was seldom empty. The problem was a state law that prohibited her from serving her patients after her partner, a physician, withdrew from the business without warning. For many of her patients that meant a two-hour round trip to the second-nearest provider.

House Bill 765 and Senate Bill 717, currently pending in the state Capitol, would allow Pennsylvania to join nearly two dozen states which permit nurse practitioners to practice with autonomy. Not only will these bills increase access to care, they will result in significant savings to the state budget—truly a win-win for health care consumers and taxpayers.

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posted by James Paul | 10:47 AM

Survey: Pennsylvania Unfriendly to Small Business

You're probably aware that Pennsylvania’s tax burden is among the most oppressive in the country. But the tax code is just the tip of the iceberg when it comes to the state’s stifling regulatory policy. Entrepreneurs and innovators are also weighed down by complex regulations and onerous licensure requirements.

According to a recent survey of thousands of firms, Pennsylvania is one of the least friendly states for small business—receiving a "D" grade for its overall business climate, a lower mark than each of its bordering neighbors. Only 5 states scored worse with an "F".

Small Business Rankings Map

The survey estimates a whopping 43 percent of low-income occupations in Pennsylvania require a state license. Starting a new business in the Commonwealth has never been more challenging.

The hidden cost of regulatory compliance is staggering. Every afternoon spent toiling away with confusing paperwork is an afternoon that could be spent providing goods or services. Every trip to City Hall to renew a permit, every hour wasted on a government phone tree, every day spent waiting for the bureaucratic stamp of approval to arrive in the mailbox—each of these is a lost opportunity for sustainable, long-term economic growth.

And let’s not forget the cynical reason behind many regulations: to protect established firms from facing new competition. The unfortunate victims of these regulations are consumers, who suffer with higher prices and fewer choices.

Making life simpler for families and job creators may sound like a minor reform, but it would go a long way toward improving Pennsylvania’s economic outlook. 

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posted by James Paul | 10:00 AM

Who Should Need the Government's Permission to Work?

What's more dangerous, an incompetent barber or incompetent emergency medical worker? Most people would say and EMT, but a barber has to undergo almost nine times the hours of training as an EMT before they can get a license to practice in Pennsylvania.

The Institute for Justice this week released a new report looking at occupational licensing requirements across the 50 states for mid- and low-income jobs. They discovered dramatic occupational licensing inconsistencies that undermine the public safety argument used by licensing proponents. For instance, only three states license interior designers and only five states license shampooers.

In Pennsylvania, 44 of the 102 occupations surveyed required licenses, including manicurist and upholsterers. Overall, Pennsylvania's occupational licensing burden is lighter than many states—ranking 38th among the states in licensing burden on residents, due to relatively low fees and education requirements.

As we've pointed out before, these regulations are often not about protecting consumers, but preventing competitors to existing businesses. For those truly worried about ugly living rooms from unlicensed interior designers or a bad hairdo from an unlicensed hair braider, there are less costly ways to protect consumers.

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posted by Elizabeth Stelle | 03:52 PM

Licensing Regulations Drives Out Entrepreneurs

A Morning Call article brings to light the anti-entrepreneurship policy of occupational licensing. The article focuses on fines imposed on folks trying, in most cases, to earn a living: "cosmetologists were the most heavily fined professionals, totaling $1.1 million in assessments since 2008."

Yes, the people that paint your nails have to be licensed by the government; so do natural hair braiders. Recently, there was a push to force interior designers to get a license from the state, apparently to protect citizens from ugly living rooms. The state even licenses small shops offering to sell your stuff on eBay, and folks giving rides to the Amish—all in the name of your safety.

Many of the fines were for working (e.g., painting fingernails) without a proper license, or on an expired license. (Curiously, one of the fines not collected was $2,000 for ... murder! Somehow, I think that fine isn't much of a deterrent.) Supposedly, this practice is justified on the grounds that "salons deal with harsh chemicals, and unlicensed operators often lack liability insurance," thus the state needs to protect customers.

Balderdash! Occupational licenses exist primarily to protect existing businesses against potential competitors. They favor big business against emerging entrepreneurs. Those most harmed by occupational licensing are low-income individuals—those who can't afford to spend 300 hours at a licensed cosmetologist school to be approved to braid hair.

What is the result? "... in many cases, these people move on to other states, for example, and can make it hard to collect [fines]." Hmmm...isn't the goal of economic policy to attract business, not drive out entrepreneurs?

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posted by Nathan Benefield | 05:17 PM

Unwarranted Police Raids

Barber Last week, the Daily Caller featured an article from the Institute for Justice (IJ), which revealed that police in Florida are raiding barbershops for drugs without search warrants, and arresting barbers for not having a state issued license.

As IJ points out, the police don't need a search warrant, because barbershops are licensed and regulated through the Florida Department of Business and Processional Regulations, where the need to follow rules supersedes things like civil liberty.

Like Florida, Pennsylvania's Department of State licenses and regulates barbershops. Last month's "Disciplinary Actions" reported that the Department collected $6,900 in fines and shut down eight barbershops in the Commonwealth, mostly for operating without a license. Acquiring a license costs almost $1,000 in fees, 1,250 hours of training, and passage of an entrance exam.

Pennsylvania has 29 professional licensing boards and commissions regulating numerous occupations. Unfortunately, this extensive network of state licensure often exists to protect current businesses from new competitors under the guise of protecting consumers. To get the state's economy back on track, restrictions on many occupations should be removed.

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posted at 03:00 PM

It's Never Sunny for Philadelphia's Small Businesses

The Institute for Justice (IJ), in its new report, No Brotherly Love for Entrepreneurs, depicts just how bad the small business climate in Philadelphia has become. The city has embraced a bureaucratic culture that has led to the lowest rate of entrepreneurship of any of the 15 largest metropolitan areas in America.

To make sure it's always sunny in Philadelphia for future entrepreneurs, IJ suggests removing these barriers:

Update Zoning Laws: Philly enacted zoning laws 150 years ago and has yet to update these laws. Instead, bureaucrats create certain exemptions, which has resulted in a red-tape disaster for anyone setting up shop in the city. Additional unnecessary restrictions, such as forbidding individuals from operating a business in their home, limits free enterprise.

Reduce Stifling Taxation: Small businesses get hit with a whirlwind of fees that can make starting a new venture difficult. In fact, the law is so stringent that anyone who makes a buck from a lemonade stand or a blog is breaking the law, unless they register with the city and pay the business privilege fee.

Remove Unnecessary Permitting & Licensing: Unnecessary layers of bureaucracy make jobs more difficult to obtain by requiring entrance exams and city certification. A recent example is the 2008 law that made it illegal for a tour guide to work without passing a history exam to obtain a government-issued license.

IJ's report contains many stories showing how Philadelphia's barriers are a detriment to its citizens. The City of Brotherly Love, and Pennsylvania as a whole, should reexamine policies that discourage entrepreneurship.

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posted at 05:06 PM

Could Legislation End Church Potlucks?

punch and cookiesStates are imposing professional licensing in more and more areas of our daily lives; restricting good intentions, individual entrepreneurship, and now threatening an essential part of church functions -- food.

Awaiting vote in the Senate is House Bill 174, legislation to rewrite Pennsylvania's eating and drinking safety code, this bill has huge implications for churches across the state. If passed as written, churches may be obligated to obtain licenses, updated kitchen equipment, meet seating capacity requirements, and pass inspections just to serve food at church events.

Part of the bill's purpose is to provide funding for organic foods, maple products, food employee certification, and farmers' markets, but the ambiguous language of the bill means churches might be faced with fines.

Religious organizations may be exempted from the license, but not the inspections (and fees), if they have a "sales and use tax license or exemption certificate from the Department of Revenue." This legislation is yet another example of an overreaching government. Churches clearly are not retail food establishments and pose no more risk than a family reunion picnic.

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posted at 02:00 PM

More on Philadelphia's "Blogger Tax"

After we noted earlier this week Philadelphia's forcing of any blogger with blogging income to pay the city's business privilege license ($50/year or $300 for lifetime), several others have weighed in on the matter.

Reason Foundation notes this as another example of the misuse of occupation licensing:

Business and occupational licensing regulations are just another example of such coercive molestation. If governments truly want to help improve the economy, they can best do it by simply removing these barriers to work and entrepreneurship and allowing greater economic liberty to naturally lead to greater economic prosperity.

Jason Stverak of the Franklin Center posits that this fee may discourage citizen-reporters:

People tend to forget that bloggers are not all teenagers grumbling about their bad dates or conspiracy theorists railing against the government. The blogosphere is no longer just for ranters and ideologues. Increasingly, straight-shooting journalists cut from newsrooms are becoming online citizen journalists or forming non-profit online journalism organizations. These seasoned journalists-turned-bloggers will quit blogging if they are taxed on their meager profits.

Alex Charyna writes that this is just another money-grab from the city:

I think the city has a sound position. It’s not about free speech or liberty or whatever. It’s about money. Some blogs run as a business (very little, but some income), and the city isn’t business friendly. 50 years of a Democrat run city has led them to scrape the bottom of the bottom of the barrel for any possible source of income. That’s the message that needs to sent.

Business people (of all kinds) have no friends in City Hall.

Freedomworks echoes this sentiment, noting the rampant corruption and overspending in the City of Brotherly Love:

Philadelphia faces a budget crisis due to massive overspending by lawmakers on wasteful projects. In order to make up for their $179 million shortfall, Philadelphia’s government has proposed everything from steep soda taxes to property tax increases.

And Paul Jacob fears the business privilege license could indeed be used as a tool against free speech:

Philadelphia’s pursuit of imaginary scofflaws may amount to just an obtuse lunge for hitherto unextracted funds. But the new protocol is also a weapon that could be selectively deployed, now or later, to harass bloggers who publish inconvenient words. Wouldn’t be the first time in our history that the power to tax has been turned to such ends.

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posted by Nathan Benefield | 11:20 AM

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