The Cost of Licensure

Last week’s Congressional briefing on state medical licensure brought surprises. Even though I have been looking at this issue since ATA started (in 1993) I had no idea the extent of the concerns by providers and the amount of potential problems facing consumers. Nor was I aware of the actual financial cost of the current system. Based on a recent examination of state policies, physician licensing statistics and fee requirements, ATA conservatively estimates that over $250 million is spent annually for additional state license fees by physicians already licensed in their home state.

Of course, this varies from state to state. For example, of the 88,000 physicians licensed in New York, 20 percent reside outside of the state and, presumably also hold a license in the state in which they reside. In Wyoming, of the 3,000 licensed physicians 66 percent live outside the state. Some states license for two years, others charge an additional application fee. Some offer a reciprocal license but still charge a fee. All of this was taken into account in our estimate.

There are approximately 850,000 active physicians in the United States, regulated and licensed by 70 state-based medical and osteopathic boards. It is estimated by the Federation of State Medical Boards that currently 22 percent of U.S. doctors hold a license in more than one state, but this number is bound to increase as medicine, physicians and patients increasingly rely on mobile devices.

In the end, the cost of licensure is not just about finances. It includes the cost of patient safety related to uncoordinated practice rules, regulation and disciplinary activities of separate, independent authorities governing thousands of health professionals.

© 2012