The Fraser Institute

The Fraser Institute

September 10, 2009 06:00 ET

The Fraser Institute: Time to Abolish Costly Regulation of Natural Health Products and Professional Licensing

CALGARY, ALBERTA--(Marketwire - Sept. 10, 2009) - The government agency that monitors natural health products has been an expensive flop, producing no discernable benefits for Canadians, and should be abolished recommends a new study from the Fraser Institute, Canada's leading economic think tank.

The peer-reviewed study, Unnatural Regulation: Complementary and Alternative Medicine Policy in Canada, also criticizes provincial licensing regimes for health care practitioners. It found licensing does little to safeguard consumers and instead creates protected monopolies and drives up prices. It recommends the current licensing system for all health care providers-including physicians-be replaced with a competitive certification process overseen by non-governmental agencies.

"With more people using natural health products and complementary and alternative medicines, governments claim they need to increase regulations covering these products and therapies. However, the data do not support a public safety argument for government regulation of either natural health products or complementary and alternative medicines," says Cynthia Ramsay, a Vancouver-based consultant specializing in health economics, and author of the report.

Government regulation of natural health products and complementary and alternative medicine practitioners will also be examined and discussed during a conference on Saturday September 26 at the Four Seasons Hotel in Vancouver.

According to Health Canada, Canadian sales of natural health products were estimated to amount to about $4.3 billion and to number around 40,000 to 50,000 products in 2004. A 2006 survey on the use of complementary and alternative medicine found that more than one-half of Canadians had used at least one alternative therapy in the year prior to the survey, a four percentage-point increase over the rate of use in 1997. Yet reports of adverse events are rare, and legislation already exists to protect Canadians from malicious or unsafe providers.

Regulating Natural Health Products

The federal government implemented natural health product regulations, overseen by the Natural Health Products Directorate at Health Canada, in 2004 but has yet to offer any evidence showing how its regulations have improved safety or provided Canadians with access to safe, effective, and high quality natural health products, Ramsay said.

"Since the launch of the Natural Health Products Directorate, thousands of natural health products are now off the market and more than $90 million dollars has been spent creating the directorate, drafting regulations, and beginning the regulatory process," Ramsay said.

"Money that could have gone towards other much-needed health care or public services has instead been used to create another cumbersome and ineffective bureaucracy that has thus far only managed to reduce choice for consumers."

Licensing Complementary and Alternative Medicine Practitioners

The study found myriad differing regulatory environments for health practitioners across the country that not only impose barriers on the ability of a practitioner trained in one province to work in another, but that also result in higher costs for health care consumers. The study also notes a growing trend across Canada of licensing complementary and alternative practitioners, which means that practitioners work with defined scopes of practice and have the exclusive use of a specific title-midwife or acupuncturist, for example-if they have met certain standards. Licensure also makes it illegal for someone else to perform the tasks within a licensed group's scope of practice, no matter how skilled they might be.

"Dozens of complementary and alternative medicine provider groups have become licensed in the past 20 years, and still many others are fighting for it on the basis that more education translates into greater quality. Yet there is no evidence of a discernible improvement in patient care outcomes," Ramsay said.

"The increased number of licensed health professions has likely only secured health providers higher wages and reduced the availability of health care to Canadians."

Ramsay examined the argument that public safety is better protected by government licensure and found that stricter licensing of a profession is most often used to limit entry to others and drive up wages while providing little or no safety or quality benefit to consumers. The stricter requirements created by licensure, relative to voluntary certification or registration with competing governing bodies, also reduce the number of entrants into a profession, increase prices, and reduce access to care.

The study recommends that all current health practitioner licenses be replaced with voluntary certification, and various organizations should be given the opportunity to become certifying agencies. Certification is similar to licensure in that an examination or other process is administered by an authority which attests a worker has achieved a certain level of skill, knowledge, and/or ability, and reserves a title for them to use. Unlike licensure however, certification permits others to perform the same type of work a certified worker does.

The voluntary certification of all health care practitioners-including physicians-would give consumers more choice when selecting a health care provider. Consumers could pay a higher fee for a practitioner with government-sanctioned skills (i.e., through a professional college) or a practitioner who is considered qualified in certain skills by an independent certifying organization or competing professional associations, or they could pay a lower fee for a practitioner without such certification.

"Competition among many providers and certifying agencies will make it difficult for any single or group of providers to achieve above-normal profits or economic rent," Ramsay said.

"Quality would likely be more actively monitored and standards more aggressively maintained because of the competition between certifying organizations and professional associations. This would encourage higher quality providers than if a monopoly licensing organization was created by the government."

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The Fraser Institute is an independent research and educational organization with offices across North America and partnerships in more than 70 countries. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit

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