For the latest example of unintended consequences in the U.S. health-care system, consider preauthorization. Before paying to cover a treatment, insurers increasingly require doctors to seek their approval. That’s meant to cut waste and ensure quality. Instead it causes delays and deprives patients of care they need.
Many patients recently have sued their insurers over preauthorization disturbances of this sort, and Democratic Rep. Ami Bera and GOP Rep. Phil Roe have formally asked the Centers for Medicare and Medicaid Services to review its preauthorization rules for the Medicare Advantage program.
As a surgeon who picks up the phone regularly to seek preauthorization, I know what the review will show: The preauthorization process delays care, compounds the administrative burden on providers, and often imposes restrictions that aren’t evidence-based.I experienced the problem firsthand last year when I ran the chief resident neurosurgery clinic in Shreveport, La. One of our patients was crippled by pain in her back and legs, and showed all the symptoms of compression in her lower spinal nerves. But before my team could run a new MRI to confirm the diagnosis, we needed approval from the company that managed the patient’s Medicaid benefits. The task took nearly a half-hour on the phone, and if the patient had wanted surgery she would have needed preauthorization for that too.
Since Louisiana expanded Medicaid in 2016, the burden of preauthorization on our clinic has become unsustainable, causing our team of doctors to waste countless hours that otherwise could have been spent with the 70 to 80 patients that need to be seen each week. A 2010 survey by the American Medical Association estimated that America’s 835,000 physicians dedicate 868.4 million hours a year to the preauthorization process. The AMA estimates that preauthorization cost the health-care system $728 million in 2012 alone, and the problem is getting worse. In 2016 a Medical Group Management Association survey found 82% of providers had increased preauthorization requirements in the preceding year.
Some critics blame tightfisted insurance companies or cost-cutting government agencies. But the underlying issue is that America’s health-insurance system puts far too much space between the parties that receive and provide care and those that pay for it. This has led to financial foot-dragging and delayed care that hurts all Americans, whether they’re on Medicaid, Medicare Advantage, employer-based insurance or ObamaCare’s marketplace coverage. Preauthorization makes insurers rather than physicians the primary gatekeepers of care.
The coming inquiry into Medicare Advantage preauthorization is a step in the right direction. But in the long term, Congress also should reform the insurance system to narrow the gap dividing the providers, recipients and financiers of care. Greater availability of health savings accounts, for example, could drive down the cost of outpatient nonemergency care.
Patients and physicians are the best judges of their clinical and financial options. Rolling back preauthorization would empower them significantly. If Congress reforms the health-care system to include more competition, price transparency and standardized processes for evaluating outcomes, Americans could become better stewards of their own care.
Dr. Menger is a neurosurgeon and a graduate of the Harvard Kennedy School of Government. He is lead editor of the academic textbook “The Business, Policy, and Economics of Neurosurgery.”