Battles Among Licensed Occupations: Estimating the Effects of Scope of Practice and Direct Access on the Chiropractic, Physical Therapist, and Physician Labor Market
Written by Editor   
Wednesday, November 16, 2016 12:08 PM

News Bite:  A very recent study reveals that expanding the scope of practice for mid-level healthcare providers such as chiropractors and PTs may potentially improve the efficiency of the healthcare market in the United States.

The report also notes that evidence suggests that, because they want to protect market share, physicians are reluctant to accept chiropractic as a viable substitute, and willingness to make referrals to chiropractors still appears limited. … If physicians are able to successfully prevent chiropractors from performing certain procedures, they may conceivably be able to defend their market share, an economically meaningful number with recent estimates suggesting 5 out of every 100 adults aged 18–64 seek nonoperative care for back and neck pain in a given year.

A very recent study released by the Mercatus Center of George Mason University examined “how state-level changes in chiropractic scope of practice and PT direct access to patients influence the wages, hours worked, and employment of each practitioner.”  The authors conclude that “broader scope of practice seems to be associated with higher chiropractor wages. … and slightly reduces the average number of hours chiropractors work per week. In certain instances … patients may receive better-quality care at lower prices by seeing a chiropractor or PT as opposed to a physician. Consumer welfare is likely to be improved by having greater access to lower-priced care and more choices for pain treatment. Expanding the scope of practice for mid-level healthcare providers such as chiropractors and PTs may potentially improve the efficiency of the healthcare market in the United States.”

The study notes that “like scope-of-practice provisions, direct-access laws may influence the earnings, hours worked, and employment of PTs, chiropractors, and physicians. This is especially true for PTs and chiropractors who directly compete with each other for clients.”  The authors found, however, “little evidence that PT direct access has affected the labor market for any of the three studied practitioners.”

“Presumably chiropractors, physicians, and PTs are all competing for market share in the $300 billion market for treating back and neck pain,” the study notes.  “Therefore, we might surmise that the three professions are substitutes for one another. A patient experiencing lower back or neck pain will have some choice among healthcare providers.” 
“Each profession will prescribe a different set of treatments,” the authors report, and “chiropractors and PTs will generally prescribe less invasive treatments, whereas physicians will be more inclined to prescribe drugs or surgery.”  The study notes that "the relationships between providers, however, may be more complicated than pure substitution. It is also possible that the three providers may be providing complementary services. In particular, the services provided by physicians, especially physicians not engaged in general practice, may complement those provided by PTs and chiropractors.”

“Because of the increasing number of individuals seeking relief from back and neck pain and related musculoskeletal conditions, chiropractors and PTs now have an important role in the market for medical services directed at treating these conditions. Whether these providers serve as complements to or substitutes for physicians depends on perspective. The nature of the relationship between these professions is partially driven by the legal environment. Specifically, scope- of-practice and direct-access laws define the boundaries between the professions. … In theory, the extent to which these providers are complements or substitutes should be evident from observable changes in their labor supply and wages arising from changes in the law.”

“Licensing statutes restrict the practice of a profession to only those individuals who have met a specific set of requirements (typically minimum training levels and examinations). In theory, restricting the supply of potential entrants into a profession through licensing may increase a pro- fessional’s earnings. Recent literature suggests this effect is important when a broad profession includes two types of service providers that might compete for clients and when one service provider can influence the licensing of the other. … Licensing statutes typically specify the tasks that license holders are allowed to perform. Chiropractors, physical therapists (PTs), primary-care physicians, and (in complex cases) orthopedic surgeons all have treatment modalities for back and neck pain. Each profession has historically had a different philosophy of the sources of pain and its management, different evidence bases supporting each approach’s efficacy, and different views on the quality of each profession’s evidence. Stated simply, there has  been historical animosity among the professions. This historical animosity, coupled with different philosophies of treatment, has led to substantial competition.”

“Recent evidence suggests that, because they want to protect market share, physicians are reluctant to accept chiropractic as a viable substitute, and willingness to make referrals to chiropractors still appears limited.If physicians are able to successfully prevent chiropractors from performing certain procedures, they may conceivably be able to defend their market share. The market share of physician visits related to back and neck pain is economically meaningful, with recent estimates suggesting 5 out of every 100 adults aged 18–64 seek nonoperative care for back and neck pain in a given year.” 

Chiropractic scope-of-practice laws vary tremendously from state to state. "Beginning in 1994, six states (Arkansas, Colorado, Iowa, Illinois, Nevada, and Wisconsin) began to allow chiropractors to perform phlebotomy. In the 1990s, 24 states began to allow chiropractors to discuss the use of proprietary drugs with their patients, and 34 states broadened the scope of practice of chiropractors also to include physiotherapy. Phlebotomy is a routine medical service, but it is none-the-less an important diagnostic procedure because it opens the door to performing blood tests and other routine medical procedures. Patients often seek advice on proprietary drugs from primary-care physicians and obtain physio-therapy services from physical therapists. Granting chiropractors the ability to perform phlebotomy, discuss proprietary drug treatments with patients, and perform physiotherapy may serve as a signal to the patient of provider quality and legitimacy; patients may be more likely to use chiropractic services in the future or may share the information with peers.”

“By expanding access to medical services, changes to scope of practice may potentially increase consumer welfare. Consumers will have more choice in providers and may be able to obtain lower prices (either directly from medical professionals or indirectly through lower insurance premiums). Broader scope of practice may also help further establish chiropractors in the market for health care.’

Another important factor that influences the market for each of these professional services is insurance coverage. Several states have enacted mandates for private insurance policies to cover chiropractic services.  Delaware was the first state to pass a chiropractic mandate in 1963. Seven more states passed mandates in the 1960s. Twenty-two more states followed the lead of the federal government and adopted a mandate in the 1970s. Ten more states passed mandates in the 1980s, and by 2010 all states except the District of Columbia, Hawaii, Idaho, and Oregon had mandates for chiropractic coverage.


Source:  https://www.mercatus.org/system/files/mercatus-timmons-licensed-occupations-v1.pdf