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Bankrupt Health Care
Supreme Court Denies Rentier Dentists

The Supreme Court smacked down North Carolina’s dentistry board this week in a much needed assault on monopolistic rent-seeking. According to Marginal Revolution, the state’s board had decided that teeth whitening was dentristy and only licensed dentists could do it. It then ordered “nondentist teeth whitening service providers and product manufacturers” to stop, and they did—and then the FTC brought a suit against the board for noncompetitive behavior. The judges ruled (North Carolina State Board of Dental Examiners v. FTC) 6:3 in favor of the FTC, and here’s Marginal Revolution’s Alex Tabarrok on what the decision means:

The court said that North Carolina can, without question, decide that teeth whitening is the practice of dentistry but they have to do so more or less explicitly–they can’t simply put the fox in charge of the hen-house by deferring the decision to the dentists.

In other words, the court raised the cost of rent-seeking. If the dentists want to monopolize the practice of teeth whitening they will have to make that case to the legislature and not rely on the unilateral actions of a board composed entirely of dentists and created for entirely different purposes.

This victory could still be reversed if the board gets legislative approval for it—but “raising the costs” for that is at least something. It’s about time the FTC got tougher on health care monopolies. We need more of this—much more. Licensing requirements and other guild-like behaviors are pervasive across the American economy, but they are particularly damaging in health care. Successful efforts to limit the supply of health care providers abound: not only licensing requirements, but hospital monopolies, restrictions on immigrant physicians, and scope-of-practice laws that limit the extent to which nurse practitioners can provide care—just to name a few. These, and others, have all contributed to making our system so very expensive. The quicker we can dismantle health care rent-seeking, the better off we’ll be.

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  • Kevin

    An excellent start. Both because legislatures should not be permitted to hand their lawmaking functions off to unelected bodies and because regulations which impose occupational restrictions reduce the ability of people to make an honest living and of consumers to buy desired services at the cheapest price. Hopefully regulations and laws setting up these sorts of restrictions will begin to fall across the country.

  • Pait

    Teeth whitening is not healthcare. Using teeth whitening in an argument about healthcare is like using mice to prove points about elephants.

    Healthcare suffers from market failures because of asymmetric information and power: are you going to shop around for a cheaper doctor when you need critical surgery? Even if you wanted, how much knowledge do patients really have?

    Because whitening is a merely esthetic decision, it doesn’t she the features that make healthcare different from normal markets. Cutting to the chase: your argument in nonsense.

  • Jacksonian_Libertarian

    Now if we could just get rid of the Obamacare Monopoly.

  • Josephbleau

    I don’t want to be, in the terms of the ruling, the Fox in charge of the hen house, rather the rooster in charge of that house.

  • FriendlyGoat

    Glad to see TAI reporting this. While you’re celebrating, it would have been nice to point out that this good decision was made by Kennedy, Sotomayor, Ginsburg, Kagan, Breyer and Roberts in favor of Obama’s Federal Trade Commission.

    The three most recalcitrant conservatives of the normal five conservatives—-Alito, Scalia and Thomas—-dissented. Anytime “the five” are split, you get the best decision.

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