Occupational Licensing

Tired of High Health Care Costs? Look at Misbehaving Dentists and the Licenses That Enable Them

Dentists use political muscle and control of regulatory boards to limit competition. How many other licensed professionals do the same?

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With memories of a certain scene from Marathon Man fading, it's likely that most Americans have a pretty positive view of dentists. They keep our choppers in decent working order despite a wide range of neglect and abuse of the pearly whites. But there is a darker side of the profession, which has developed a reputation for playing hardball in protecting its licensed practitioners from potential competition. It's an object lesson in the dangers of occupational licensing—a demonstration that letting any industry coopt the coercive power of government does little to help consumers, while protecting the paychecks and prerogatives of the licensed few.

"Lawmakers from Maine to Alaska see a different side of dentists and their lobby, the American Dental Association, describing a political force so unified, so relentless and so thoroughly woven into American communities that its clout rivals that of the gun lobby," the Washington Post reported earlier this month.

You know reporters are troubled by bad behavior when they compare it to "the gun lobby"—culturally parochial modern journalists' equivalent of invoking the devil. But what they report is truly troubling. The Post adds, "Critics say the ADA has worked to scuttle competition that could improve access to dental care in underserved areas and make routine checkups and fillings more affordable."

The article goes on to detail efforts by organized dentists to intimidate lawmakers who consider allowing competition by dental therapists—non-dentist practitioners who can offer basic dental care at lower cost than dentists. It also discusses battles waged by the Federal Trade Commission against state dental boards—regulatory bodies run, as is the case with most licensing bodies, by and for the benefit of existing practitioners in the industry they oversee.

"The Federal Trade Commission today announced a consent order settling charges brought in September 2003 that the South Carolina State Board of Dentistry unlawfully restrained competition in violation of Section 5 of the FTC Act by adopting a rule that required a dentist to examine every child before a dental hygienist could provide preventive care—such as cleanings—in schools," the FTC announced in 2007.

"Today, the Supreme Court affirmed the Federal Trade Commission's position in recognizing that a state may not give private market participants unsupervised authority to suppress competition even if they act through a formally designated 'state agency'," the FTC reported in 2015. Yes, the scare quotes around "state agency" are original to the FTC press release—perhaps an acknowledgment by a federal regulatory body of the regulatory capture of the state body by the people it regulates, and its operation on their behalf (whether there's an implied lesson in there about all regulatory bodies I leave to readers' imaginations).

So it's clear that dental licensing bodies function to protect dentists from competition, to the point that they've even had their hands slapped by the U.S. Supreme Court for their behavior. Is there any counter-balancing benefit to be had from licensing dentists?

Not really, was the conclusion of a study performed by Morris M. Kleiner and Robert T. Kudrle, of the University of Minnesota and published in 1997. They compared regulatory regimes across the United States, from highly restrictive to permissive, and concluded that "increased licensing restrictiveness did not improve dental health, but did raise the prices of basic dental services."

There's a lesson in here about creeping regulation over time, since "a state that changed from a low level of restrictiveness to one that was in the most restrictive grouping could expect to see an increase in the price of dental services of 14 to 16 percent."

Those raised prices resulted not just in less accessible care, but also in a roughly 10 percent income boost for dentists in more highly regulated states. That means dentists have a built-in incentive to seek tighter regulation, resulting in stiffer prices.

That matters at a time when the cost of dentistry is rising far faster than inflation.

"The overall cost of all goods and services has approximately doubled" since 1984, the journal Dental Economics noted in 2015. "the cost of medical services has risen more than twice as rapidly as the overall rate of increase (212 percent). Unfortunately, the cost of dental services has risen even more steeply. Since 1985, there has been a 279 percent increase in the cost of dental services."

So, the research suggests that licensing dentists—trained medical professionals—does not improve the quality of dentistry, but does limit competition and raise prices. This isn't a surprising conclusion overall; study after study tells us that occupational licensing chokes off competition, reduces worker mobility, raises prices, and enriches a select few.

"The burden of occupational licensing is stifling entrepreneurship in America," the Goldwater Institute warned in 2015.

"Today nearly one-quarter of all U.S. workers need a government license to do their jobs," the White House cautioned in 2016. "The prevalence of occupational licensing has risen from less than 5 percent in the early 1950s with the majority of the growth coming from an increase in the number of professions that require a license rather than composition in the workforce."

"Lower wages and higher unemployment rates for unlicensed workers, as well as reduced migration rates for those with licenses, all suggest that the social costs of licensing are larger than many have previously believed," the Brookings Institution reported last year.

But the militant—and largely successful—efforts of dentists to limit competition and protect their incomes links occupational licensing to yet another concern of modern Americans—the cost of health care. Red tape doesn't just make it harder to start a business, or make a home repair more expensive—it contributes to the high and rising cost of medicine in the United States.

And it's not just dentists protecting their turf through the regulatory apparatus.

"Increasing the restrictiveness of optometrists' licensing examinations had a positive and statistically significant impact on the price of the eye examination and eyeglasses but had a statistically insignificant impact on the quality of the eye examination," wrote Deborah Haas-Wilson, a professor of economics at Smith College.

"By and large, optician licensing appears to be reducing consumer welfare by raising the earnings of opticians without enhancing the quality of services delivered to consumers," Edward J. Timmins of Saint Francis University and Anna Mills of the Mercatus Center found when they addressed the topic in 2015.

Is there any reason to doubt that physician resistance to nurse practitioners and other providers also raises costs with little or any improvement to quality of care? Or that the licensing of physicians themselves limits choices and contributes to the high cost of modern medicine?

Part of the solution would seem to be to ease the way for competition. More competitors can increase availability of services and reduce costs.

"An extensive review of the literature documenting care provided by dental therapists and clinical outcomes worldwide indicates that they offer safe, effective dental care to children," a report from the W.K. Kellogg Foundation says of the alternative providers so vigorously opposed by many organized dentists.

"We encourage the Ohio legislature to consider expanding general supervision of dental hygienists and licensure of dental therapists, and to avoid limiting general supervision and dental therapy practice," the FTC wrote to Ohio lawmakers in March, giving its own thumbs-up to at least some expanded competition.

But why another licensed profession that will, in turn, inevitably seek to protect its own prerogatives and limit competition through its special legal status? As we've already seen, licensing dentists and other medical practitioners seems to raise costs without improving quality. Licensing more practitioners helps to expand competition and availability, but doesn't actually address the fundamental problem of licensing itself. Admittedly, not everybody is ready for a world without the (dubious) protection offered by some sort of official endorsement of various practitioners' specialized skills. But that doesn't mean we're stuck with state-enforced red tape.

"There are a number of possible solutions to the problem of asymmetric information," the Brookings Institution report acknowledges in a discussion of possibilities ranging from voluntary options to coercive approaches of the sort that created the current occupational licensing morass. "Some are purely private: third party organizations with relevant expertise can attest to the competence of a worker, often through a private certificate or reputational markets like Yelp can help consumers share their experiences with particular workers."

Even some government officials agree.

"In cases where licensing is not strictly necessary, certification, registration, and bonding are often a better alternative," the United States Department of the Treasury says in a report on occupational licensing reform. "For example, private- or state-issued certificates can help consumers make well-informed decisions by identifying professionals with different degrees of experience and training."

Certified workers are more likely to move to where their skills are needed, Brookings mentions. That's because certifications are usually portable across jurisdictional lines, while licenses are not.

It's too early to know what specific solutions will evolve to fix the mess we've created with occupational licensing. But the over-the-top intimidation tactics of the ADA and its shiny-toothed shock troops have done the cause of reform a favor by reminding us that there's more to fear than faint memories of a scene from Marathon Man when we visit the dentist.

NEXT: Mike Lee, Jerry Moran Torpedo Senate Health Care Bill

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  1. Barbers and interior decorators first, then move on to the hard targets — dentists are the least of the Big Bad Three because it’s just teeth cleaning and fluoridation took the wind out of their sails; doctors are second worst, since those medical buzzwords and continual advancements are head to argue against; but lawyers are the worst since they write the rules. Lawyers don’t really need anybody else’s backing, but doctors and especially dentists sure need them.

    1. The market for lawyers is contracting due to technology (web-wills etc). Just like turbo-tax is putting some small-time accountants out of business.

    2. The non-licensed people often charge less. I had to have some “home improvements” made. The licensed contractors who came left a lot to be desired. Instead I “hired” a guy who works in construction who did a far superior job for 2/3 rds the money.

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    3. Don’t be fooled… Dental is absolutely a TOP concern and the stories, speak for themselves!!!
      http://www.welcometodds.com/th…..alpatients

    1. Would upvote this if this lame comment system supported upvoting.

  2. When I was young and just a bad little kid
    My momma noticed funny things I did
    Like shootin’ puppies with a B B gun

    I’d poison guppies, and when I was done
    I’d find a pussy cat and bash its head
    That’s when my momma said

    (What did she say?)
    She said “My boy, I think someday
    You’ll find a way to make your natural tendencies pay”

    You’ll be a dentist
    (Be a dentist)
    You have a talent for causing things pain
    (Pain)
    Son, be a dentist
    (Son, be a dentist)
    People will pay you to be inhumane
    (Inhumane)

  3. Apart from major restoration, paying cash for Dentistry is surprisingly affordable.

    Implants are really the only exception.

    1. Big problem here: lousy choices for dental insurance even in the face of ridiculous prices. Implants in Canada are much cheaper, and dental insurance is widely available and reasonable. This is a racket.

    2. Affordable at the cost of patients health!! Listen to the last audio on this page, it speaks volumes pun intended! http://www.welcometodds.com/dds-page-1
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  4. Just another data point in my belief we need to end all government required occupational licensing.

    1. Government required occupational licensing is one reason for the economic troubles we now have. As for unskilled people attempting to do things they don’t know enough about, certification by a private agency would resolve this problem. Of course then anyone could become certified just by showing they had the necessary knowledge. How they obtained this knowledge wouldn’t matter which likely would put much of our present day institutions of education into a real bind. Much of the educational requirements we have in these fields only exists because a law was passed requiring it. Prior to recent times, hospitals trained their own nurses, trained people using task specific training to do tasks that now require a certificate from an institution of education.

      This is why when my mother spent two weeks in the hospital in 1948, her entire bill, including doctor fees was $300. The room rate was $10 a day back then. As late as 1978 the hospital was still training nurses, training people to do other medical tasks. The room rate $85 a day. Now the nurses are trained in institutions of education, as are all of the other staff people. The consequence is a great increase in the cost of providing these services than before.

  5. Here is the problem age old problem with Gov med or single payer. People want socialized medicine costs but capitalistic medical quality. You can’t have both w/o huge costs and corruption. Until people get on board with “clinics” used in socialized medicine, the costs will continue to be outrageous. What I mean by “clinics” is going to the pharmacy to get diagnosed and supplied with meds needed for common illnesses…..much like a teeth cleaning clinic in the above article. Let the simple stuff be taken care of by lower cost systems. But ya think that Dr. lobby will give up that cash cow? How about opening up some more medical schools to fill the Dr shortage? Until these core issues are address, socialized medicine is nothing more than a fatal bureaucracy waiting to happen….VA care for everyone.

    1. That’s the space “urgent care clinics” try to fill, that step between a doctor’s office and an emergency room where you have something funny going on and need to be seen soon, but it’s not like you have a gun-shot or anything.

      Sadly, they tend to require doctors, and that gums up everything and they end up being almost as bad as emergency rooms.

      1. This is one of things that keeps me as a libertarian as these groups all use the force of government to get their way. We could also start trimming back on patent and copyright to the length of time they were in force when first passed.

    2. Solution to the doctor dictatorship is repeal of prescription laws that give them so much power presently. Note that they did not enjoy this power until the FDR administration (not a friend of freedom) passed these laws favoring doctors. Prior to this time people relied far more upon the druggist at their local drug store for the more simple problems. As it stands today a pharmacist will be much more aware of possible side effects from any medication than doctors do. Side effects also vary by dosage, which can create problems the MD’s usually aren’t that much aware of. In medications there is a recommended dosage and a maximum dosage as allowed by the FDA.

    3. Pharmacists in the UK have the same legal prescribing powers as do MD’s. Someone with a doctorate degree in pharmacy knows far more than any MD about the effects of drugs at all levels of dosages. As part of the Medicare Advantage plan my wife and I have, we do have “access” to such a person.

    4. A completely deregulated health care system using single payer (could a private agency) wouldn’t cost all that much. Note that both France and Germany use private insurance systems. If you force competition between agencies, then there is a great likelihood that they would cost less than a government run system with employees working under Civil Service rules. Also most state and federal employees are also unionized as well as being Civil Service rules. A private non-union agency would certainly outperform a similar government agency.

    5. During the 90’s, the AMA was afraid of an excess of doctors. They lobbied the government to limit the number of residencies. So. The government used Medicare taxes to reimburse teaching hospitals for residencies and limits them to 100,000 per year. Then there are other requirements that increase cost, for example, with all the foreign doctors that began coming into to the country because of AMA induced doctor shortage a test was required of these foreign doctors to make sure they understood English. But it was determined that it would be discriminatory if just the foreign trained doctors had to take. So, now all American graduating have to take the test at a cost of $1,500.

  6. Makes me think of therapy. To be a “therapist”, you need that degree and licensing/certification/whatever. To be a “counselor” you just need a shingle.

    And I think that’s the right way to handle it. Not necessarily with having a separate name (though that makes it easier to parse out the level of degree/certification/etc), but that you can still perform the job without state approval, you just have to make it clear that you don’t have that stamp of approval.

    The flipside of that is that if your insurance/employer/whatever is willing to cover “therapy”, they’ll probably require you go to the certified professional therapist, because they don’t trust the quality guaranteed by a counselor’s shingle.

  7. I have reluctantly come to the conclusion that we should outlaw all professional organizations and labor unions under the basis of “restraint of trade” laws. That the American people would be better off if organizations of this nature were not allowed to exist since they all use the force of government to get their way. Or at least prohibit members of these organizations from holding elective office.

    1. Read my Empowered patient page there’s an interesting article on how the dental community is protected. http://www.welcometodds.com/the-empowered-patient

  8. Dermatology is the highest-paying medical specialty, because dermatologists have limited the supply, limited the residencies and fellowships a physician must complete in order to become a dermatologist.

  9. I just had a crown replacement in Puerto Vallarta, Mexico that costs $10!! Ten bucks at a PRIVATE dental clinic, not charity nor govt.! At the same time, my sister in New Orleans had one for $800.

    1. Why are you forcing those Mexicans into slavery?

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  11. My local dentist conglomerate has offices everywhere, each one with a garish fountain in the waiting room and an Xray machine all warmed up for me every six months. Like I frickin’ care, since I’m really paying out the wazoo for the privilege to have a hygienist torture and talk me to death for 25 minutes or so.

    1. Take advantage of my research, be careful of their ‘perfect smile’ pitches! http://www.welcometodds.com/the-empowered-patient

  12. Dentistry has become a Multi-Billion dollar a year industry that has no conscience and makes no apologies. My story is a shocking revelation of how thousands of American’s are potentially getting taken and how your health, may be at risk!
    LEARN FROM MY MISTAKE, DON’T BECOME ONE!!
    Read AND LISTEN to my tragic story, their words, speak my truth!
    Key Notes of Interest:
    Pay special attention to last audio on this page: http://www.welcometodds.com/dee-s-dental-story
    Pay special attention to the first audio has the lab owner explains what I supposedly had and why:
    http://www.welcometodds.com/dds-page-3
    Then read the ‘actual’ certificates just below it where you’ll see there isn’t a drop, of the Bio-Compatible Titanium.
    So essentially, labs are allowed to fraudulently advertise a dental device as one alloy while deceitfully substituting it for another at the risk of the dental patients health and no one is reporting on it?
    Please help spread the word, this should not be happening to people!! Thank You!
    Please visit my ‘Empowered Patient’ page and take advantage of my research so dentists won’t take advantage of you!

  13. Nice article! IMHO dentists sphere should be absolutely private plus covered by insurance.
    Actually, it’s one of the dissertation topics we have been working last days. You can find dissertation writing help at https://master-dissertations.com/

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