Vigilante: Prior Authorization Pushes Too Far

At the writing of this column, the killing of UnitedHealthcare CEO Brian Thompson looms large in the news. This loss of life is a tragedy and a heinous crime, with anguish for the families of the victim as well as the accused. Yet across many social media platforms, much of the messaging expresses no sorrow for the individual but focuses on the $22.3 billion profits the parent organization reported for 2023. Such unwarranted anointing of the criminal as a vigilante hero reveals a pervasive anger of Americans toward commercial health insurance companies. As physicians, many of us may share frustration with large payers, including UnitedHealthcare. The response of the American people has been ugly, but the “good” and “bad” players in the health cost drama are more nuanced.

The payers
Healthcare is big business in the United States and getting bigger. The Centers for Medicare & Medicaid (CMS) released 2023 spending data in December 2024, revealing a healthcare spend of $4.9 trillion. Private insurance represented $1.46 trillion. One provision of the 2010 Affordable Care Act was to establish the Medical Loss Ratio (MLR), limiting profits and administration costs by compelling insurance companies to spend at least 80 percent of premiums on medical care and quality improvement. Any premiums income in excess was to be rebated to policyholders. Although the intent of policing insurers and protecting consumers may have been laudable, an unintended consequence was to remove incentive for insurers to drive down the total value of medical claims. Twenty percent of $1.46 trillion looks better than 20 percent of mere hundreds of billions.

Much of the groundswell anger against UnitedHealthcare and insurance companies generally focuses on claim denials experienced by patients. Patients, who are already paying premiums and often very steep copays and deductibles, may think that UnitedHealthcare and its ilk have caused financial hardship and compromised personal health. Certainly, from the physician standpoint, stonewalling efforts by insurers via prior authorization and claims denial undermine our ability to provide necessary care while creating a monstrous administrative burden.

But consider the nuance: The CMS data demonstrate that the per-patient expenditure for private insurers in 2023 was $7,605, a 9.7 percent increase over 2022—although this amount remains far below Medicare and Medicaid per-capita expenditures. Costs of providing care have exceeded inflation, driven by factors including rising healthcare wages and hospital consolidation.

However, health insurance has also morphed since its inception. Initially, medical insurance existed for catastrophic injuries or conditions, just as auto insurance covers an accident. Premium pooling allows overall lower payments by the individuals to cover the unfortunate few who will need coverage. As improvements in medical care allow more people to live longer with chronic conditions, utilization of care rises.

The patients
Patient-centered care prioritizes the needs, values, and preferences of the individual. This is the right approach, what I would want for myself and my family. But regrettably, this individualistic approach can create an unintended consequence when preferences spar with value-based care, characterized by the equation value = quality/cost.

During my years practicing in a large integrated healthcare system, the focus on high-value care resonated with my values. Why order a test that would not change management? Early in practice, I found that most patients were amenable to a thoughtful explanation when I demurred requests such as an inappropriate MRI scan.

As internet access expanded, I found that Dr. Google increasingly became a challenging competitor rather than a collaborator, positioning patients to refute recommendations based on my years of training and experience. Certainly, educated patients make better choices, but unfettered access to information of dubious quality creates a barrier to reasonable conversations.

Direct marketing to patients also pushes therapies with marginal benefits but maximal costs. As patients focus on their personal definition of value, the cost of treatment to the system may play a minimal role. What was once an expectation of insurance to cover only catastrophic costs has shifted toward assumption of coverage for lifestyle choices and anticipated events—like an expectation that auto insurance will cover window tinting and tire replacement.

The physicians
“Moral hazard” affects physicians as well as patients. This economic term, defined by Oxford Languages’ dictionary as a “lack of incentive to guard against risk where one is protected from its consequences, e.g. by insurance,” captures the disconnect of cost from decision making around healthcare spend. As physicians, the cost of the care we prescribe or recommend does not directly impact us and often only modestly (through copays) affects our patients. Use of clinical practice guidelines provides a safe harbor of recommendations which should be defensible against prior authorization rebuttals.

But sometimes patient-centered care can be at odds with evidence-based care. For me, pushing back against patient preferences in the interest of demonstrating value became much harder when I changed to a private practice model. The conversations took longer, compromising office efficiency. More problematic, as I discovered from some unpleasant reviews on various platforms, was that what felt like rational discussions led to patient dissatisfaction.

Next steps?
Our healthcare system is not a simple dichotomy of “good” patients and “bad” insurance companies. In a video to employees, the CEO of parent company UnitedHealth Group offered, “The environment we find ourselves in is a complex one, not one that was ever designed by anybody.” That patients, physicians, and other stakeholders not even addressed have some complicity in the cost of healthcare reflects that complexity.

Historically, the physician’s pen was deemed the most expensive medical instrument; all costs stemmed from our orders for care. Prior authorization and denials curtailed some of that power, but the public outcry may put steam behind legislation designed to limit prior authorization overreach, such as the Improving Seniors’ Timely Access to Care Act. As physicians, our part is to wield our expertise wisely, choosing evidence-based treatments. “Gold card” programs reward responsible physicians by eliminating prior authorization on procedures for which physicians have demonstrated 100 percent approval. Sadly, programs are only sprinkled across states and payers, and the federal legislation remains stalled.

For the insurance companies, the vigilante cry should be viewed as a harbinger. The big business of medicine may be pushing powerless patients too far.

Alexandra E. Page, MD, FAAOS, is a foot and ankle specialist in private practice in San Diego, California, and the deputy editor of AAOS Now.

References

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7. Congress.gov: H.R.4968 – GOLD CARD Act of 2023. Available at: https://www.congress.gov/bill/118th-congress/house-bill/4968?q=%7B%22search%22%3A%22gold+card%22%7D&s=1&r=1. Accessed Dec. 26, 2024.
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