Healthcare Licensing and Liability

The United States’ affordable care crisis and chronic physician shortage have required advanced practice registered nurses (APRNs) and physician assistants (PAs) to assume increasingly important roles in the healthcare system. The increased use of these nonphysician providers has improved access to healthcare and lowered the price of care. However, restrictive occupational licensing laws—specifically, scope-of-practice laws—have limited their ability to care for patients. While these laws, by themselves, have important implications for the healthcare system, they also interact with other legal regimes to impact the provision of care. Restrictive scopeof- practice laws can increase the malpractice liability risk of physicians and decrease this risk for APRNs and PAs via several traditional tort doctrines, such as respondeat superior. In this Article, I provide the first empirical analysis of the interplay between malpractice liability and scope-of-practice laws in the provision of healthcare. I concentrate on obstetric care and analyze a dataset of nearly 70 million births over an eighteen-year period. The results demonstrate that relaxing APRN and PA scope-of-practice laws significantly reduces the caesarean section rate—which is currently over three times the rate recommended by the World Health Organization—when malpractice liability risk is low. When malpractice liability risk is high, however, relaxing these laws results in no change in the caesarean section rate. I find similar results for other outcomes, such as medical inductions of labor. The results thus elucidate an important interaction between scope-of-practice laws and malpractice liability. Based on this evidence, which shows that relaxing scope-of-practice laws can significantly reduce the number of women who unnecessarily undergo major surgery, I argue that states should eliminate restrictive scope-of-practice laws for APRNs and PAs. Doing so will remove unnecessary limits on capable healthcare professionals, better allow malpractice liability to deter the delivery of unsafe care, and improve patient health outcomes.