Physician Licensure and Telemedicine : Some Competitive Issues Raised by the Prospect of Practicing Globally While Regulated Locally

This paper is based on comments presented at a University of Maryland roundtable regarding legal impediments to telemedicine. Physician licensure – like professional licensure generally – is a barrier to entry when it is much of anything at all. Not all barriers to entry are substantial or durable, much less undue or unlawful, and it does not follow from the very nature of physician licensure that it is anticompetitive, fails to provide consumer benefits, or is not, on balance, cost-justified. On the other hand, any particular licensing scheme may evidence one or all of those failings. This paper is concerned, in particular, with the costs state-based physician licensure may impose on a particular area of innovation in health care delivery – that is, the development and adoption of telemedicine. Barriers to entry fostered by substantially similar but formally distinct licensing requirements are a key concern. The framing issue of the roundtable – legal impediments to telemedicine – dovetails with a sort of competitive inquiry: certain impediments to competition (barriers to entry in particular) are identified; if the impediments are not trivial, we move to the question whether they are justified by countervailing consumer protection benefits or other pro-consumer efficiencies. The heart of the policy problem is this: Telemedicine promises in various ways to reduce the costs and extend the reach of many health care services, but the advantages of remote and networked expertise may be poorly accommodated by licensing schemes that were developed to regulate local medical practices – practices historically dominated by face-to-face encounters between a physician and her patient. State-based licensing restrictions may impede the electronic flow of expertise and information to and from qualified practitioners across state lines, and not just would-be, but unqualified, providers of health care services. It is argued that current regulatory costs are substantial and that regulatory barriers to entry across state lines are under-rationalized at best. Possible policy reforms are considered. It is suggested that some form of mutual recognition or reciprocity could reduce the costs of interstate commerce in health care services, while leaving in place state-based mechanisms for physician oversight and discipline