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Thursday, August 19, 2010

Defending the Wicked Part 11: The Unlicensed Doctor

The unlicensed doctor, as the name suggests, is a person who performs medical services without having a license. This guy is very much so hated by the masses, "how dare you operate as a doctor without a license!", they say. We often hear in the news about unlicensed doctors that were caught performing medical services and now are in a lot of legal trouble, possibly even prison. But what is surprisingly is that the unlicensed doctor is not only completely innocent in what he does but he is heroic in his actions.

The key issue in this whole discussion is the nature of a license. What is a license? A license is a document either directly issued from the state or a document from a private entity authorized by the state which gives you legal permission to do something that otherwise is treated as illegal. The most common example is a driver's license. It is a document issued by the DMV, which is a monopolistic state entity, which has the only legal right to issue a driver's license. Once you have a driver's license you are given permission to drive a vehicle, otherwise driving a vehicle is illegal without a license. Some licenses can be issued by a private entity. I believe, the license to be an accountant, CPA, is from a private entity (though I may be wrong, please correct, my accountant friend told me it is privately owned). However, one must have a license to be an accountant. So even though the license is from a private entity rather than from the state the state still requires the license. Thus, to summarize a license is a document that gives you legal permission to do something.

There are two objections to licensing. One objection is a philosophical objection and the other is an economic objection. I will first use the philosophical objection to licensing and then explain the economic objection.

The problem with licensing is that it negates liberty of the people. Liberty means that one can live his life as he so desires, and thus he can do so as he pleases provided he is not bothering the lives of anyone else. Licensing negates this statement. To see why this is so consider two people. One person is sick and another is a doctor, except he has no license. The sick person asks the doctor if he can treat his disease, the doctor agrees. Notice what just happened. The two people entered into a contract with one another. It is the sick patient's own life and his own right to decide which doctor he chooses, and the doctor has the right to agree with the patient and treat him. If the state busts down this contract by saying, "the doctor is not licensed", it has just violated the liberty of both the patient and the doctor. It is not anyone else's business what goes on between the doctor and the patient. Therefore, the state cannot be involved in this arrangement. However, the state will get involved in this arrangement between the doctor and the patient if they happen to find out about it. Thus, the state violates the liberty of the people on whom it declares licensing. The unlicensed doctor therefore cannot be trailed for anything, he is simply exercising his freedom. Thus, the unlicensed doctor should in actuality be innocent.

The economic problems of licensing includes a limit in the supply of doctors. Consider that there are 8 doctors per every 1000 people. If the state declares that all doctors get a license this number will have to drop to say 3 doctors per every 1000 people. And as a result there is a smaller supply of doctors. Which means the price for medical care will have to increase. Thus, doctor licensing causes increased prices of medical care. But there is another problem. Licensing is expensive, it requires doctors to put in a lot of time, money, and energy into obtaining a license. This means when they charge for medical care their prices will reflect the high costs that they put into their license. Therefore, we would expect to see higher prices in medical care than otherwise would have been without a license. These economic problems of licensing are actually part of the reasons why health care in the US is much more expensive than it otherwise needs to be.

Now consider the situation of medical care if there was no state mandated licensed doctors. The market would be extremely competitive. There would be all various kinds of doctors. Some doctors who do not even speak English, say they emigrated from a forgein country. Furthermore, there would be many different medical procedures, some cheap and some expensive. This great diversity of doctors and care would satisfy the demand of the people. And we would see much lower prices than are now. Consider this. Does it really cost $200 to get a filling in a dentist? No. It can be brought for $30 or even less. And this would certainly be possible in a highly competitive market if the state did not interfere with the market forces. It would be really easy for the public to gain access to medical care in such a system because it is left unmanaged and unlicensed.

But apparently these arguments against licensing are not good enough for most people. They still demand doctors to be licensed. They argue that if it was not for licensing there would be a lot of fraud doctors. There would be a lot more medical errors because the doctors are not as experienced, and so many more people would die. Licensing, as they claim, saves and protects the people.

We will refute this objection in favor of licensing again by first using a philosophical argument and then an economic argument.

Whose life is it? Is it your life to decide what the sick patient can choose or his own life? It is his life and so he is the only person in the entire universe who can decide which doctor he can choose for medical care. If he wishes to choose a doctor who is a higher risk for a medical error then so be it. It is his life after all. I am sure you would agree with me that people should have the right to commit suicide. Denying people suicide is an act of enslavement when we enslave them to this world. If they can choose suicide then al fortiorti they can certainly choose which kind of doctor they would like. Besides because the market would be so competitive there would be a myriad of different kind of doctors. Basic doctors who never got educated in any school and high ranked doctors who finished Columbia medical school. He would be able to choose the appropriate doctor that he desires that reflects the cost he is willing to pay. To ban unlicensed doctors is to steal from this patient the freedom of making the choices for himself.

It is just not true that if doctors were able to operate without a license then suddenly there would be chaos in the streets with fake doctors stealing all the money and killing patients by medical errors. There are jobs at the moment that do not require a license that can have the same scenario but it just does not happen. Consider computer repairmen. I do not believe these people have licenses. One can ask that perhaps if these computer repairmen have no licenses then they will scam their costumers by pretending they have the knowledge in computer repair. While secretly they will mess up the computer, pretend they fixed it, and get the money. I am sure this has happened a few times. But in nearly every case computer repairmen are legit and they do not scam their costumers. There are two reasons for that. First, the simple reason, is that it is illegal to break apart some one else's computer. If there were able to ruin some one's computer they would be sued for their damages. So they would not easily get away with it. Second, the market punishes bad repairmen. If a repairmen is a terrible repairmen very few people would want to hire him. Thus, the market by itself discriminates against inefficient repairmen over efficient ones. The market is what forces companies and entrepreneurs to be efficient. This is precisely why computer manufactures make good computers, not some messed up box with wires falling out, even though computer manufacturing is highly unregulated. The same situation would also be true with our unlicensed doctor. He would not be able to pretend to be a real doctor. If he was to mess up then he would be sued for doing so. Sued really badly, possibly put in jail if he killed another person. No fake doctor would have such an incentive. And secondly, the market will choose the better doctors from all available doctors. Here is one more example to consider. In New York City there is no license to be an architect. I am not sure if this is true anymore or not, but I remember watching a video series by Milton Friedman, which was about 20 years old, and Milty said that there are no licenses for architects in New York City. If we applied the same criticism to unlicensed doctors as to unlicensed architects then it would mean that their ought to be lots of building falling down in New York because they were build by incompetent architects, but this is far from the truth. Thus, the argument that licensing is what protects the patients is just not true based on this similar historical example and the reasons given above.

In absence of licensing there would exist other systems of ranking doctors. Doctor's would be able to advertise themselves based on which schools they went to. Doctor's would also gain a reputation from their services. People would choose to go to the high ranked doctors and pay more knowing that they found a good expert. So there will certainly be systems that function like a licensing system except this one is based on the market rather than being state mandated.

I speak from experience here. I have used the services of unlicensed doctors. I have been to a few unlicensed dentists. I am very happy with the job that they did. This was many years ago and their work still holds well to this day. Besides it was so cheap! I remember I paid $20 to get myself a filling done. Try getting that in a professional licensed dentist office. One time I had a filling fall out and they were nice enough to agree to put in a new one for free. So they were very nice people that definitely knew what they were doing. In fact, they even discouraged me from doing certain procedures because they said they were unnecessary. The very same procedures that Columbia told me I had to do. After several years the unlicensed dentists knew more about what they were talking about, as I can see the result now.

There is one more argument that needs to be made. The supporters of licensing say that licensing saves lives, but I disagree. I disagree because they are only focusing on what is seen, not what is unseen. Let me explain what I mean. Let us assume that licensed doctors have a .01 probability of killing a patient and that unlicensed doctors have a .02 probability of killing a patient. Of course, these numbers are made up and I am specifically working with the assumption that licensed doctors are more efficient than unlicensed ones - which in actuality I disagree with. Because the supply of licensed doctors is limited only a certain number of people would have access to their care, say 1 million. If we are to assume these 1 million where to die than under these assumption the licensed doctors would have saved 999,000 lives. Now consider the same situation with unlicensed doctors. With unlicensed doctors the supply is much greater and so many more people are treated, in this case say 1.5 million. Then the number of lives saved by the unlicensed doctors is 1,470,000. This is a lot more than the number of people saved by the licensed doctors. Thus, even if unlicensed doctors are less efficient (which does not appear to be the case) they will still end up saving more lives altogether than licensed doctors. In this manner the licensed doctor actually kill 480,000 in an "unseen fashion" i.e. by simply never treating these people.

So what is the real truth to licensing then if it is not to save lives and to improve efficiency? I have no idea, but I am going to make a guess, doctors want to secure their profits with licensing. Doctor after all have a strong profit motive to secure more profits. Thus, it seems reasonable why the AMA, the monopolistic entity responsible for granting licenses, would have an incentive to secure profits for doctors who happen to be members. Doctors are afraid of being undercut by amateur doctors and by forgein doctors who operate in the US. So they create an licensing scheme to legally get rid of these people and secure themselves the profits. This is what I believe to be the real reason behind licensing. It has nothing to do with saving lives or improving efficiency in the medical profession but everything to do with securing higher profits - remember it is a monopoly after all.

All of these arguments when taken together point to the conclusion that the unlicensed doctors are more beneficent to society, not to mention the only kind of doctors compatible with a free society. But what is so sad is that the state pursues these kind of people. An unlicensed doctor is healing another person for a much less fee than he otherwise pays to a licensed doctor. Why would we ever persecute such a person?! Why would we ever persecute another human being who is helping another human being at a cheaper price? It is so inhumane and cruel for us to go against these people. Unlicensed doctors help other humans at cheaper costs and they do all of this under constant fear of getting caught and possibly being enslaved into an iron cage known as prison. These people are nothing but heroic!


  1. whether the government should be involved in licensing is one question, and whether the current licencing practices in particular,

    but to treat unlicenced care givers who could be total quacks as altruistic heros who are helping people is carrying it a bit too far.

    as is the libertarian assumption the dangers inhererent in lack of professional oversight can be countered by market forces.

    The huge numbers of people going to rebbes and other faith healers should lay that assumption to rest.

  2. > A license is a document either directly issued from the state or a document from a private entity authorized by the state which gives you legal permission to do something that otherwise is treated as illegal.

    One must also assume the licence is granted after a period of training and a demonstration of competency in the licenced field.
    The dange rof the unlicenced practitioner is that his mistakes wind the patient up in the licenced doctor's office and cost twice as much to fix.

  3. "but to treat unlicenced care givers who could be total quacks as altruistic heros who are helping people is carrying it a bit too far.":

    Where do I say he is altruistic? He is more so heroic than the licensed doctor. I am sure you would agree to say that most doctors are heroic, therefore the unlicensed doctor is heroic also. But the unlicensed doctor has to struggle through the fear of being caught for what he does and for that he is much braver and more heroic than licensed doctors.

    "The huge numbers of people going to rebbes and other faith healers should lay that assumption to rest.":

    How is this an argument against what I just said? You have the exact same situation happening today.

    "One must also assume the licence is granted after a period of training and a demonstration of competency in the licenced field.":

    Not always. Sometimes it is given to pay who bribed enough people. But let us assume that what you say is always true with licensing.

    "The danger of the unlicenced practitioner is that his mistakes wind the patient up in the licenced doctor's office and cost twice as much to fix.":

    I already addressed this argument above. Unlicensing does not imply less efficiency.

  4. The danger of the licensed provider is that people believe the state knows something about the skills involved, and hence that the licensure is meaningful. They fail to do due diligence since they believe that all licensed quacks (sorry, docs) meet some standard. However, the state is inefficient and ineffective, and consists largely (by population) of lawyers. Those lawyers appoint medical boards to do the licensing, and so the licensing ends up having more to do with protecting privileges than ensuring some standard of medical care.

    The test the market system must meet is not perfection - if perfection is attainable somewhere, we should choose that. In reality, though, the meaningful comparison is - would the market do better or worse than the current monopolist system? Economics gives us a clear answer; history shows us how implausible it is that the state-AMA complex can do better.

    Really, states specialize in mass murder. What makes them expert in healing?