Does general welfare give citizens less incentive to work or produce?

It certainly does. However De Tocqueville’s prescient essay “Memoir on Pauperism” is a clear elucidation of how public welfare undermines a society

Another thing to keep in mind is that there would be (and there are) organizations that would rate and review doctors. Certain organizations may have membership standards or an accreditation process that you need to go through before you become a member (think of something like the American Dental Association or some of the state/local associations as an example). So you could find a doctor who is part of an organization you trust. Or you are free to go to a doctor who has no affiliation with any groups whatsoever. The choice is yours,

This is the reality: the cartels use their license control powers shut down so many medical schools and cut class sizes so much that the number of graduates from the medical schools is such that every doctor on Earth could literally make you crawl on your hands and knees and bark like a dog to get service and you couldn’t get around it because they are all at capacity most of the time. Monopolies don’t only affect prices. They affect prices and/or service quality. Not just on the individual level. Because the powers of licensing are given specifically to the medical union, no competing organization such as a splinter group of doctors with with alternative standards can exist. Licensing is plain bad for consumers of the licensed service and in the case of health care it kills. There is not benefit whatever.

What you are talking about is mere certification and registration with the union that can be checked by consumers for verification of credentials, which can be and was done under any circumstance with no licensing.

Despite personal hardships and even tragedies it does overall decreases incentives to work / produce.
As a child I experienced a similar situation, so I know the matter and I know it is hard to accept the above remark, nonetheless that’s how it is.