An article about the use of prior authorization in Medicare prompted this post. Health spending has two main factors–price per unit and number of units used. While price is the primary reason for high spending in the US, inappropriate utilization plays a role. Health plans have for several decades used a variety of tactics to address inappropriate utilization. Some of these are financial, for example, pay doctors a flat amount for all care delivered to a patient, so they have no incentive to order more services to generate income. Others are designed to force more thought about what is ordered. A primary method is prior authorization, under which a physician must get approval from the health plan before the patient gets a service, or risk not getting paid for the service.
Prior authorization has been criticized for interfering with physician judgement, raising administrative costs, creating delays in receipt of care, and in some cases, causing patient abandonment of needed services. There are a lot of regulations now to limit its use and health plans on their own are trying to find other methods for managing inappropriate utilization. Meanwhile fee-for-service Medicare is intending to expand use of prior authorization. The NEJM authors criticize the initiative, which is actually pretty limited, for most of the reasons I list above. Their suggested alternatives are essentially worthless. (NEJM Article)
The underlying problem here is twofold. One is that many doctors are not nearly as competent or smart as you would like to believe. They also have difficulty keeping up with advances in care and care pathways. So relying on their judgment is often unwarranted; their judgment about the maximally effective and efficient treatment for a specific patient may be is flawed. They also let their judgment be swayed by patient demands and in the case of medical products, by pharma and other medical product company marketing. The second big issue–doctors are financial creatures, as we all are, and they are clearly motivated by making money. So no matter how much they might protest, they deliver and order more services when it means they get more income.
We can and should educate physicians constantly on the most appropriate care pattern for patients, and there are very sophisticated technology tools to assist with that. But we also need enforcement mechanisms, there have to be incentives or penalties to ensure that appropriate care, and only appropriate care, is what is delivered.
