One final example of licensure’s impact on quality is given by a 1978 study of the quality of contact lens fitting. The study looked at 502 households who had been fitted for contacted lenses in the previous three years and were still wearing contacts. The study was conducted with the cooperation of the American Academy of Ophthalmology, the American Optometric Association and the Opticians Association of America and representatives from these groups examined the survey participants to determine the quality of contact lens fitting without any knowledge of which type of provider had rendered the service.
The study looks at five different groups: ophthalmologists, Noncommercial optometrists, commercial optometrists, unclassified optometrists, and opticians. Ophthalmologists receive the most training and opticians receive the least. Statistical tests showed that commercial optometrists tended to outperform noncommercial optometrists; optometrists as a whole preformed similarly to ophthalmologists. Opticians also were found to have similar overall quality scores to ophthalmologists and optometrists.
Despite quality similarities, there were significant cost differentials between the five groups:
|Average price for contact lenses and fitting (1980)|
What can we conclude from this study? First, if there were licensure requirements that mandated that only ophthalmologists could prescribe and fit contact lenses, this would likely create a welfare loss to society. Opticians, optometrists, and ophthalmologists preformed similarly on quality measures, however, optometrists and opticians had significantly lower prices than ophthalmologists. This study shows that licensing to too high a quality standard is not optimal.
This study, however, is limited by the fact that 1) quality is relatively easy to observe for patients in the case of contact lens fitting and 2) contact lens fitting is a less technically complicated procedure than say cataract surgery or the treatment of glaucoma. Procedures in which patients can easily observe physician quality and providers do not need a high technical skill level are not good candidates for licensure requirements. One would expect to encounter different findings if the study was based on a procedure with 1) more uncertainty in the quality measurement and 2) more technical skill needed to perform the procedure accurately. For instance, one would likely find significant quality differences between the three groups in the case of cataract surgery (even though currently only ophthalmologists are certified to conduct surgery).
Study: Hailey; Bromberg; Mulholland; (1983) A comparative analysis of cosmetic contact lens fitting by ophthalmologists, optometrists, and opticians, Federal Trade Commission, Bureau of Consumer Protection. Study summary found in: Frech, H.E. Regulating Doctors Fees, Chapter 4 “Licensure and Competition in Medical Markets” by Lee Bernham, pp. 87-90.