Who decides if you get a life-saving surgery? It actually might be your insurer

Life-saving medical care is complex and expensive. Imagine needing an organ transplant – an operation that often needs to be carried out within hours for viability – only to find out that your insurer delays or prevents your surgeon from moving forward because of a process known as prior authorization.

Prior authorization is used by most health plans and requires medical providers to obtain approval from insurers before delivering pricey services or medications. While prior authorization was put in place to verify appropriateness of care and prevent inappropriate, unnecessary or ‘wasteful’ care from costing insurance companies, it can bog down providers with administrative burden and also delay or even prevent vital patient care from happening at all.

Prior authorization and mistrust in health care

Critics argue that prior authorization takes away from doctors’ abilities to deliver life-saving care in the time that’s most appropriate for patients. For example, if a patient needs an emergency surgery or procedure, but the doctor has to wait for the insurer’s approval, the timing of the care could be out of their hands. Many are concerned of such a significant influence that health insurers have within health care that should be kept between patients and their doctors.

“Many Americans view these companies as driven by profit rather than a commitment to serve their customers,” Mario Macis, a Carey Business School economics professor, told Associated Press last December. “And this creates a big disconnect.”

The lack of trust Americans have in the U.S. health system has been more apparent in the last few months; however, this comes to no surprise for many experts in the health care space. A 2023 Gallup poll showed that two-thirds of Americans don’t trust the health care system.

“While prior authorization hopes to answer the question about appropriateness of care, there’s a reality that a lot of times that appropriateness of care is subjective,” said Amit Jain, a core faculty member of the Hopkins Business of Health Initiative at the Johns Hopkins Carey Business School. “A good example of this is that clinicians rarely appeal denials, but when they do, almost 80% of these denials are overturned, so that begs the question: Why were these requests denied in the first place?”

Prior authorization reduces health costs but can be a ‘blunt instrument’

On the other hand, though, insurers and supporters of prior authorization deem it necessary to control costs and manage health insurance market rates. Prior authorization is used to target the most expensive medical services to ensure insurance companies are only paying for the expensive treatments, procedures, and medications that are absolutely needed.

“The cost of prescription drugs, if we don’t get a handle on that, it’s just going to start bankrupting, in particular, the nonprofit community health plans, and then our nation is going to be left with a single payer, and that single payer is not going to be the government, by the way,” said Ceci Connolly, CEO of Alliance Community Health Plans. “We as a society, again, and policy makers, need to think hard about the health care system we want to have in this country.”

However, the prior authorization process affects all patient care, necessary or not.

“Prior authorization ultimately ends up being a bit of a blunt instrument,” said Ravi Gupta, assistant professor and prior authorization researcher at Johns Hopkins School of Medicine. “It does reduce both inappropriate and appropriate care as far as we know, but this is also a central question that requires a lot more research.”

Providers have expressed frustration with inconsistent authorizations and not knowing what criteria needs to be met to grant authorization for treatments.

“The other piece here is the trust among clinicians in their employer or in the health care system at large, and their role of being able to give the care that they feel is medically appropriate to their patients,” added Gupta. “I think there is some erosion of trust around that too, and clinicians feel like they have decreasing amounts of control over time.”

A potential solution

Representatives from the insurance industry agree that prior authorization is a process that could be improved with automation and technology, in addition to increased transparency between insurers and clinicians. However, they want clinicians to hold up their end of the partnership.

Geisinger Health Plan, for example, uses a software tool that streamlines prior authorization requests with just a few questions for the provider. Insurance industry titans have said that these types of tools get you an answer much quicker, while also outlining what qualifications are required for approval of the service.

“Much of the solution could be offering decision support tools and bundled authorization, where certain decisions are automated to yes,” said Connolly. “We do often find in our health plans that clinicians are not providing some of the basic information; It’s got to be a real partnership here.”

However, Connolly alluded to a bigger issue with for profit health plans answering to shareholders.

“I think it’s really important to delineate which insurers are really causing the friction, and why,” she said. “And dare I say, it’s because, in many instances, they answer to shareholders, and they’ve got to record profit margins that candidly, community health plans don’t.”