It's Time for Scope of Practice Reform

Current laws increase health care costs and limit access

By Kahryn Riley | April 6, 2016

Michigan faces a widespread shortage of primary health care providers, and state rules on midlevel health care providers have held up a valuable solution to this problem. Nurse practitioners and physician assistants offer competent care in more locations and at a lower cost than physicians, but these professionals are limited by protectionist restrictions known as “scope of practice” rules. Policymakers should loosen these restrictions to make health care services easier to obtain and afford.

Scope of practice restrictions are defended as an attempt to raise standards of care by limiting the range of procedures a medical professional is licensed to perform. They also impose extensive training requirements, limit a professional’s ability to write prescriptions, and require costly annual license fees. A growing body of scholarship shows that the restrictions do more harm than good for patients and consumers.

New research is discovering that scope of practice restrictions result in higher costs by artificially increasing the income of providers through a rationing scheme that does nothing to improve the quality of care. The research indicates that access to care is improved when nurse practitioners and physician assistants can offer more procedures and operate more independently than current laws allow.

A working paper from the Mercatus Center at George Mason University in Virginia shows how restrictions on nurse practitioners and physician assistants raise health care costs. Expanding the scope of their practices reduces the cost of Medicaid outpatient claims by 11 percent, and improves patients’ access to health care with little effect on quality.

Access to affordable care will improve when we streamline regulations that allow physicians to delegate patient care to physician assistants. Michigan expanded the scope of practice for physician assistants in 2011. That reform enjoyed broad support within the health care industry, which lauded it as an important step toward greater efficiency and effectiveness in delivering care, but policymakers should not stop there.

In Michigan, a majority of counties are designated as Primary Medical Care Health Professional Shortage Areas by the U.S. Department of Health and Human Services, which compiled a list of counties with a higher-than-average ratio of residents per physician. The demand for nurse practitioners and physician assistants has grown tremendously in recent decades because, without these midlevel providers, many patients in underserved areas would get no care at all. Lawmakers should rely on the professional judgment of active practitioners and craft policies that enable nurse practitioners and physician assistants to help meet the needs of Michigan patients.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

Michigan Pushes Back Against Feds on Labor Regulations

NLRB ruling could end franchising 'as we know it'

By Tom Gantert | April 6, 2016

Last fall Michigan lawmakers passed and Gov. Rick Snyder signed a package of bills aimed at protecting franchise businesses from a ruling by the National Labor Relations Board. The ruling was unprecedented, with the American Bar Association saying that it would mean “an end to franchising as we know it.”

Franchises – McDonald’s restaurants are the best-known examples – involve a local business, a “franchisee,” that licenses brands and trademarks from another company, called a ‘franchiser.” Trade association experts say this popular business model accounts for nearly 500,000 Michigan jobs.

Earlier last year the NLRB ruled that franchisers like McDonald's can be held responsible for the actions of all the people who work for all the thousands of small businesses that happen to have permission to use their brand. This applies even if the franchiser does not pay those workers and has no control over them. In most cases these workers’ supervision, scheduling and pay come from a local business owner.

Legal experts say the ruling makes it easier for unions to organize workers in industries like restaurant chains, where lots of independent small businesses operate under franchise agreements with a few big companies like McDonald's. Instead of having to organize employees in thousands of small firms, unions can focus on just a single big franchiser. The NLRB ruling could also potentially hold franchisers liable for the actions and working conditions of employees who work for independent small businesses.

“The Michigan Legislature’s action is to be sure that, in matters of state law, the ruling by the NLRB will not affect the traditional and correct interpretation of the employer and employee relationship that has governed franchise law in our state for decades,” the National Federation of Independent Business said in a statement.

“With close to 16,000 establishments within Michigan and over 420,000 food service jobs provided by the industry, it is of the utmost importance to protect and encourage the entrepreneurs throughout this great state,” said Robert O’Meara, the vice president of government affairs for the Michigan Restaurant Association. “We believe that the legislative package signed into law is a positive step forward to better protect not only the business owners which help drive Michigan’s economy and provide individuals with well-paying jobs, but maintain a business-friendly environment within the state as well.”

The American Bar Association predicted in spring 2015 that if the NLRB ruling made a franchiser responsible for a franchisee’s employees, “the economics of the franchise relationship would be so fundamentally altered that one can almost predict an end to franchising as we know it.”

A labor law expert at the Mackinac Center for Public Policy said the Michigan Legislature deserves thanks for protecting small businesses in this state.

“The NLRB is consistently doing whatever they can to make unionization easier, whether workers want it or not and without any regard for the law or the consequences for business,” said F. Vincent Vernuccio in an email. “Their latest gambit would undo decades of precedent in the franchise industry and do irreparable harm to one of the bedrocks of small business.”

The SEIU national office didn’t respond to an email seeking comment.