Research Highlight: Provider Turf Wars and Medicare Payment Rules

The US labor markets, particularly in healthcare industries, often exhibit barriers to entry and strict scope of work restrictions. However, concerns about healthcare access and costs have led to some deregulation efforts. A recent study co-authored by Elizabeth Munnich, associate professor in economics, and published in the Journal of Public Economics, empirically examines the relaxation of occupational rules for anesthesia care, where physician-trained anesthesiologists and certified registered nurse anesthetists (CRNAs) provide overlapping services and often collaborate. Following CRNAs gaining practice independence, the study finds a modest 3% reduction in anesthesiologist billing for CRNA supervision, with no significant increase in CRNA utilization. These results caution against overestimating the impact of removing provider regulations and suggest that other factors influence the demand for specific healthcare providers.

In the US, there’s been a trend toward formal credentials and regulatory rules across various industries and occupations. Healthcare, in particular, has strict licensure requirements. While these regulations could either boost service prices and incomes for providers or ensure care quality, their effects are complex. The study focuses on anesthesia care, a crucial aspect of medical procedures, comparing physician-trained anesthesiologists with CRNAs. Despite the anticipation of deregulation resulting in increased CRNA utilization, the study shows only a slight reduction in anesthesiologist billing for CRNA supervision within the Medicare program, and no significant change in CRNA usage. The findings highlight the intricacies of healthcare labor markets and urge policymakers to consider a broader perspective when relaxing provider regulations.