Occupational licensing and the government as a con artist, or the myth of professional regulation as deterrent of self-serving professional misconduct

My common topic on this blog is occupational regulation (including attorney regulation) and conceptual inconsistencies in such regulation by the government.

Regulation of all licensed/regulated professions is declared to be done for purposes of consumer protection.

Yet, various prohibitions on regulation very often do little to protect consumers, if not outright hurt consumers, by restricting competition while providing no quality protection.

One of such prohibitions is the so-called prohibition on "mixed practice".

For example, a lawyer cannot have a joint firm with an accountant - even if it is a tax lawyer, and even if an accountant may know certain aspect of, obviously, accounting, better than a lawyer, and a consumer may benefit from such a joint practice - from its versatility and, likely, lower prices.

Also, in many states statutory laws are introduced (obviously lobbied by the already-entrenched professional elites) to prohibit "mixed services" in the medical profession, too.

One of such a prohibition has recently resulted in a multimillion verdict against a New York attorney whose offense was that he taught chiropractors how to open businesses with doctors employed or on the board of directors, while the sole ownership of the firm belonged to a chiropractor, not a doctor.

Of course, what difference would it make to a consumer other than good?

A consumer coming to a chiropractor who also employs a doctor, wins from versatility of practice and lower prices.

Not so - says the New Jersey legislature (lobbied by doctors, obviously) and now the New Jersey Supreme Court, which has a self-serving interest to uphold such a scheme as a legislator of regulation for attorneys, and of similar "mixed service" prohibitions for attorneys.

The legislative purpose of the prohibition, as the court explains, is that a chiropractor, as the sole owner and employer of a doctor, cannot be allowed to influence medical decisions - that would constitute insurance fraud per se.

The decision of the New Jersey Supreme Court, which came out after long years of litigation on May 4, 2017, may very well be a retaliative knee-jerk reaction of the court against a New York attorney, simply because he was a New York attorney, for the simple reason that New York declared its right to discriminate against New Jersey attorneys (who may live closer to Manhattan than the majority of New York-residing attorneys), and the U.S. Supreme Court refused to hear a lawsuit challenging constitutionality of that discrimination.  On April 17, 2017, by the way, 17 days before the New Jersey Supreme Court retaliated against a New York State attorney.

This exchange of slaps, obviously, did not help consumers.

New York consumers of legal services, where the justice gap is a re-iterating lamentation by the NYS Court system, are only hurt by discriminatory laws against out-of-state attorneys, reducing the number of providers.

Similarly, New Jersey consumers of chiropractor and medical services are only hurt when chiropractors are prohibited to hire willing doctors to work in their offices.

Moreover, the New Jersey Supreme Court missed the obvious 1st Amendment implications where an attorney, on a lawsuit of an insurance company no less, is ordered to pay for the alleged fraudulent content of lectures about business structure aimed to provide better, cheaper and more versatile services by willing licensed providers to willing competent consumers of such services.

When this whole country is in uproar about who was elected as President and what is going to happen with healthcare, this case, brought by an insurance company, somehow fell through the cracks and is overlooked, yet, it has a drastic impact on the end prices and quality and scope of services for consumers - and, as to prices, both paid by insurance and out-of-pocket.

Yet, the whole prosecution, from the standpoint of the declared purpose of occupational regulation by the government in order to protect consumers, makes absolutely no sense, and, more, exposes the sham of occupational licensing as lobbying privileges for privileged professions.

First of all, nowhere in the court decision is there any proof that such schemes hurt consumers and lead to providing substandard services.

The whole statutory scheme of insurance fraud through "mixed services", or "doctor in a box", as it is often called, are based on a presumption - that a chiropractor, a person with a "lesser license" and training than a doctor, will improperly influence a doctor in his employ.

The lawsuit involves THREE licensed occupations:

1. lawyers;
2. chiropractors; and
3. medical doctors.

All of these professions are regulated by the government in order to protect consumers.

All of these professions have their own ethical codes and disciplinary procedures.

All of ethical codes prohibit unethical conduct.

All of ethical codes prohibit to act outside of the licensed professional's competency.

Thus, the PRESUMPTION that a licensed chiropractor will necessarily:

1. act outside of his competence in influencing medical decisions of a doctor, and
2. will actually influence a licensed medical doctor who will violate his own ethical rules in order to cave to a chiropractor who is his employer -

defies the whole need for licensing regulations.

If individual licensed doctors are presumed (by the insurance fraud statute) to readily cave to influence by AN employer (no matter, a chiropractor or not), what difference does it make, what license, if any, that employer has?

Is it better that an individual medical doctor is FINANCIALLY influenced in his MEDICAL decisions by another doctor?  By a whole bunch of medical doctor - a hospital board?

Because, if the law PRESUMES that doctors will be easily sways by those who pay them in their medical decisions, in violation of their licenses, we do not need to license doctors, because such licensing is useless and only raise the cost of medical services, which is already sky-high and unaffordable to many Americans.

But, the law does so presume.

Same as it presumes that a lawyer may not engage in a "mixed practice" with an accountant, for example, for the same reason that it will be then presumed that the lawyer will violate his ethical rules and provide services not in accordance with his INDIVIDUAL licensing obligations, but looking only at the bottom line. 

And so will do the certified accountant - who is also a member of a profession regulated by the government, and is also governed by his own individual ethical rules.

As it often happens, the desire of the government to deliver a quick slap to a "sister state" - or for any other political reason - reveals more than the government wanted to.