Recent research has examined the impact of changes in occupational licensing, particularly Universal Licensing Recognition (ULR), on access to healthcare in the United States. With physician shortages persisting across the country, especially in regions with aging populations, policymakers have increasingly focused on improving the regional supply of healthcare providers to better meet patient demand.
Although interstate licensing compacts such as the Interstate Medical Licensure Compact (IMLC) were introduced earlier, ULR is more expansive. It represents a single reform that allows physicians licensed in one state to practice in another without the need for state-specific re-licensure requirements.
To compare the impact of ULR on the availability of physicians and patient access to care, researchers used data from IPUMS-USA (2018-2023), the Doctors and Clinicians National Downloadable File of the Centers for Medicare and Medicaid Services, and the Behavioral Risk Factor Surveillance System (BRFSS). The researchers compared states that had already implemented the IMLC with those that adopted ULR but did not impose residency-based restrictions, allowing them to isolate the effect of universal licensing reciprocity.
The results demonstrate that ULR has a significant effect on out-of-state physician practice, although it does not substantially influence interstate migration. Physicians in non-IMLC states were more likely to provide services across state lines through locum tenens programs and telehealth, which expanded access in areas that have traditionally struggled to recruit and retain healthcare professionals. This increase in labor supply directly translated into improved consumer welfare.
Indicators of access to healthcare also showed significant among both working-age adults (25–64 years) and older adults (65+ years). The percentage of working-age respondents who had a personal healthcare provider improved by 6.0 percentage points, while the proportion experiencing cost-related barriers to care declined by 1.5 percentage points after the adoption of ULR. Among older adults, access to a personal healthcare provider increased by 2.5 percentage points, although there was no major change in cost-related barriers. This trend is likely explained by the widespread coverage of Medicare among the elderly population.
These results indicate that ULR is a successful initiative to increase access to necessary and expensive health services and mitigate financial obstacles for the working population. The study also highlights important regulatory considerations. For example, requiring state residency as a condition for license reciprocity limits the potential benefits of ULR by restricting out-of-state practice, thereby reducing its ability to improve healthcare access.
The primary findings were supported by several robustness checks, such as falsification tests and analyses examining the relationship between ULR and out-of-state physician engagement, as well as patient access. These analyses suggest that the observed effects are not driven by other policy changes.
The broader implications of these findings are substantial. The concept of occupational licensing is traditionally supposed to ensure consumer safety and maintain the quality of the services, but it may also limit labor by accident, increase expenses, and decrease access to patients. By facilitating cross-state practice while maintaining professional standards, ULR has the potential to improve the efficiency of healthcare delivery without compromising care quality, while also promoting more equitable access to services.
Although the research did not quantify direct healthcare cost savings or improvements in service quality, it provides strong evidence that regulatory reforms such as ULR can enhance the local supply of physicians and thereby improve consumer welfare. Future studies may explore the long-term effects of ULR on healthcare costs, service quality, and access among vulnerable groups and its influence on other licensed professions.
As healthcare systems continue to face rising demand and uneven distribution of providers, this study highlights the potential benefits of facilitating interstate practice. Policies that allow healthcare professionals to practice across state lines may help address workforce shortages while improving patient access to care. Universal Licensing Recognition, therefore, represents a promising approach to make healthcare delivery more accessible, efficient, and patient-centered across the United States.
Reference: Oh YT, Kleiner MM. Does universal occupational licensing recognition improve patient access? Evidence from healthcare utilization. NBER Working Paper; 2026. doi:10.3386/w34030
