IEI Insight: Less regulation of dentists can mean better oral health

This IEI Insight is provided by Maddi McConnaughhay, a Gail Werner-Robertson Fellow and author of a forthcoming paper on the impact of occupational licensing on dental health.

Occupational licensing impacts more than just the legal side of different practices in the United States. It has a significant impact on access to these services, along with control of the labor markets. This can have devastating impacts of the lives of the people in the United States as a side effect of the control of quality in care.

Occupational licensing is put in place to ensure the quality and safety of dental practices, but in the long-term it shrinks the labor market for dentists. Due to the decrease in the supply of labor, patients see an increase in the price paid for dental work. These economic effects have a significant negative impact on the dental health of the nation. States with more rigorous licensing regulations suffer from worse healthcare because it is not as easily attainable.

In 1950 there were 70 occupations that required an occupational license, but in the late 1970s there were over 500 occupations that required occupational licenses. This shows significant growth in occupational licensing in less than a half-century. This growth in regulation raised the question of whether regulators in the United States are imposing occupational licensing requirements to increase quality, or merely using it to control labor markets and increase the profits for the people performing the services.

To practice dentistry, one must obtain an occupational license with requirements that vary by state. Some states have much more strict occupational licenses compared to others for dentistry. Arkansas has the lowest ratio of dentists to people at 40.93 to 100,000.

The Institute for Justice was involved in a case where an Arkansas orthodontist was cleaning teeth at discounted rates because there was a high need in his community. The Arkansas State Board of Dental Examiners threatened to revoke his license if he continued to offer services for low prices. Arkansas is the fifth most regulated state in the United States for occupational licensing for all professions combined. Arkansas is significantly more regulated than neighboring states with 128 occupations compared to 41 occupations in Missouri and 68 occupations in Mississippi.

This shows the inconsistency in occupational licensing across the states and also a clear illustration where occupational licensing may be directly responsible for obstructing the delivery of quality dental care to patients who need it. An orthodontist is licensed as a general dentist first, but then will go on to specialize to be an orthodontist. The orthodontist has been trained to perform teeth cleaning, but this restriction on general practice by specialists results in a licensing protocol that does not protect the quality of care for the patient but instead acts as a restraint on the labor market that prevents care for underserved populations.

Connecticut is the second most highly regulated state in the United States at 155 occupations that require an occupational license. As one illustration of how tightly Connecticut regulates dental care, the state’s dental commission, comprised almost entirely of dentists, issued a rule restricting certain teeth whitening procedures involving use of an LED lamp to dentists only. These restrictions made it virtually impossible to get one’s teeth whitened if one didn’t go to a dentist; therefore, to whiten teeth, professionals needed an occupational license for dentistry.

Insurance is an important factor in determining who is most affected by occupational licensing. Both Arkansas and Connecticut show that child beneficiaries of Medicaid receive less dental care than children with commercial plans. On average child beneficiaries of Medicaid plans receive less dental care than children with commercial plans. Medicaid plans do not compensate dentists as well as commercial plans. In Arkansas, commercial plans receive 3.99 percent more care than Medicaid. In Connecticut, commercial plans receive 10.46 percent more care than Medicaid. Because compensation is lower, dentists are less willing to accept Medicaid patients. Occupational licensing decreases the supply of dentists, which in turn enables dentists to be more selective in accepting patients based on compensation. This leads to a decline in the availability of dental care for lower socioeconomic classes.

After researching the occupational licenses for dentists in every state, I started to analyze the occupational license for dental hygienists in every state. I focused on legal restrictions on performance of a particular procedure: whether dental hygienists are permitted to place and finish a composite resin silicate restoration. I found that in 12 states dental hygienists are allowed to perform this procedure. In 18 states dental hygienists are prohibited from performing this procedure, meaning the dentist is required to carry out the procedure. By requiring the dentist to perform this procedure and not allowing the dental hygienist to do the procedure, this takes time out of the dentist’s schedule that could be used for other appointments. Allowing the dental hygienists to perform these procedures in more states would allow dentists to serve more patients. This additional capacity in the dental services market could result in dentists being less selective in choosing patients, taking on more Medicaid patients, and bridging the gap in the dental health.