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Should Medical Licenses Be State-Based?

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The first ever question I asked a patient during my third-year clinical rotations was, “Can you confirm that you are presently in the state of California?” At the time, I was completely confused as to why my patient’s location mattered; after all, this visit was happening through a computer screen, couldn’t they be located anywhere? What I didn’t understand at the time is that medical licensing in the U.S. occurs via a state-based system; if a physician is licensed in California, they can’t see or treat patients in Vermont. Unsurprisingly, this system has created challenges for the implementation of telehealth and telemedicine, which has seen massive growth since the COVID-19 pandemic, with current usage stabilized at 38 times higher than prior to the pandemic. Given that my medical education has been inextricably linked to telemedicine, it has become clear to me that telemedicine is here to stay, and we need a licensing system that allows for innovation and growth in our health care industry.

Our current state-based licensing system is founded on the constitutional concept that states have jurisdiction over intrastate activities while the federal government has jurisdiction over interstate activities. Simply put, medicine has historically been practiced at the local level and like lawyers, architects, and plumbers, clinicians are licensed by local state boards. But the advent of telemedicine has made this more complicated; if a clinician in one state can virtually see a patient in another, this visit is now an interstate transaction. Like telemedicine, the COVID-19 pandemic also exposed the inflexibility and cumbersome nature of our current system when states were faced with a clinician shortage. As such, many states and CMS passed waivers loosening licensing requirements. These waivers were temporary and per the tracker maintained by the Alliance for Connected Care, 39 states have ended their emergency declarations and only 14 states still have licensure flexibilities in place.

Given the pandemic and the rise in telemedicine, the medical licensing system has been increasingly discussed and multiple think pieces have been published in the past year with various suggestions on how to improve and modify the process. Three major proposals have gained ground:

The first, The Interstate Medical Licensure Compact (IMLC), has created an expedited pathway for physicians to gain licensure in multiple states. Currently, 35 states have joined this program and more than 32,000 licenses have been issued since 2017. Efforts to make state participation mandatory are currently under discussion and a bill introduced into the House of Representatives would make funding from the Bureau of Health Workforce conditional on adopting the compact. Unfortunately, while this compact appears to have many benefits, physicians are still faced with the economic burden of applying for multiple licenses.

A second option that many have suggested has been a system of reciprocity, in which states would mutually recognize each other’s medical licenses. This would mirror the Nurse Licensing Compact (NLC) established in 2015 and the more recent update called the enhanced Nurse Licensing Compact (eNLC) ratified in 2017, in which all participating states recognize the nursing license that the nurse’s home state issues. Similarly, the Department of Veterans Affairs (VA) permits any physician, regardless of where they are licensed, to provide telemedicine services to all patients within the VA system.

The third option, and the most drastic proposal, is the suggestion that we should move to a federal medical licensing system. This proposal is appealing to many as it would allow physicians to simply apply for one national license and gain freedom of mobility. However, implementation of this proposal would likely be impractical and critics of this proposal often point out that the current state-based system allows states to monitor credentials and take disciplinary action. However, a federal system to standardize licensing doesn’t necessarily rule out the ability to have a state-based disciplinary system.

Ultimately, I am not trying to argue for any one system, as every system appears to have its pros and cons. However, we do need a new system. The Obama administration commissioned a report investigating the effects of occupational licensing and found that strict state-based licensing requirements limit the mobility of the U.S. workforce, raise consumer expenses, and limit economic growth. As a new intern starting residency this summer in internal medicine, I have just now started to think about what it means to have a medical license. My first introduction to medical licensing was having to apply for my physician-in-training permit, which was a surprisingly simple process in comparison to the many other challenges I faced when moving to a new state. However, I will most likely move again in the future and the idea of having to acquire a medical license in a new state feels daunting, costly, and complicated. What the COVID-19 pandemic has shown me is that my peers in other industries have entered an era of mobility while those of us in medicine seem to still be gridlocked. My career, like many others in my generation, will invariably involve digital health, and we need to find a way to investigate the effectiveness of the above proposed models for medical licensing to ultimately simplify and modernize our current system.

For proponents of the system of reciprocity there already exists models — namely the NLC and VA systems — that would provide excellent data regarding the feasibility and results of this proposal. The National Council of State Boards of Nursing is currently conducting two longitudinal studies to evaluate the economic impact of the NLC for state boards of nursing and to determine the effectiveness of the eNLC information campaign. However, neither of these studies truly looks at the most important questions, including the effects of the NLC on nursing mobility, telemedicine, nursing care in underserved regions, financial outcomes, disciplinary action, and licensing rates. Similar data should be collected regarding the VA system and the impact of allowing clinicians to conduct telehealth visits around the country. Furthermore, given the relaxation of licensing requirements during the COVID-19 pandemic, we should attempt to investigate how many physicians pursued practice in other states, whether patients from underserved regions saw an increase in medical access, and whether patient safety was in any way compromised during this period. In addition, given the recent uptick in medical licenses via the IMLC, efforts should be made to better understand the impact of these new licenses. The FSMB has recently put together a Workgroup on Telemedicine which has been charged with evaluating the impact of telemedicine on many of the above questions and it will be interesting to see what their reports eventually show.

Not only do we need more research, but I believe we need to be more creative and daring with our future. The medical field has historically been slow to adapt new changes and technology. Given the stakes of patient safety, this makes complete sense. However, in a world in which digital fashion, NFTs, and AI are gaining ground, our current medical licensing system in which physicians must go through a burdensome and lengthy application process for each state of practice feels, frankly, ancient.

I am personally fascinated by how technology like blockchain can streamline and de-centralize the medical licensing and credentialing process. In 2017, the state of Illinois launched the Illinois Blockchain Initiative in which one of the developments was a partnership with Hashed Health to explore the application of blockchain and distributed ledger technology to the process of issuing and tracking state medical licenses. This effort to make medical licenses more portable could serve as a fascinating starting point to more effectively verify and credential medical licenses with the potential for growth into a national decentralized ledger of medical licenses. This is just one of many creative ways we can try to use technology to innovate and push the bounds of our current system.

Technologic innovations in health care, like telehealth, are going to continue to outpace the rate at which regulatory decisions are made. At the end of the day, I think it is safe to say that our current state-based system lacks the flexibility required to adapt to the increasing mobility of our current world. But to keep up with the rest of society and avoid stagnating due to an outdated process, we need to use research and data to push state legislatures to make essential reforms.

If you were to redo the medical licensing system, how would you organize it? Share your plans in the comments.

Ruchi Desai is a current first-year internal medicine Resident at UT Southwestern Medical Center. During her free time she loves to read, listen to podcasts, and learn as much as she can about the world. She is a 2021–2022 Doximity Op-Med Fellow.

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