By Jim Notaro, Co-Founder, Ethicos Health
UnitedHealth announced this week that it is scaling back prior authorization. By fall, most medical PA requirements disappear for roughly 1,500 rural hospitals, and the company is “leading” an industrywide push to “standardize” the rest.
It’s hard to call out the naked emperor, but…United claims that 92% of its prior authorizations were being approved?! This seems like confirmation that the prior authorization process was not being monitored and managed or as many people have opined used as a barrier to care?
Here’s the kicker, the press release reads as if eliminating inappropriate prior authorization is some magnanimous gift. The rest of the industry is supposed to applaud that this abuse of a valuable utilization tool has finally been recognized.
Prior auth has been misused. That doesn’t make it the villain.
The concept of prior authorization is a good idea. For medications and procedures which might be subject to use in a non-evidence based manner, prior authorization provides a safety net. The problem was operationalizing the concept. How do you compare complex guidelines to “noisy” progress notes and lab results transparently and at scale.
When large payers couldn’t “crack that nut” PA was bastardized to drive drug rebates and create a gauntlet to care access. Patients waited. Prescribers burned out completing inane question sets. Care got delayed for things that should have been routine. The prior authorization was demonized.
But here’s what the news cycle keeps missing:
The concept of prior authorization is not the problem. The way it was operationalized is the problem.
Why PA exists in the first place
Health plans, PBMs, and self-funded employers have a fiduciary obligation to spend premium dollars wisely. High-cost procedures and drugs that have the potential to be used in non-evidence based ways or are overpriced for the modest clinical outcomes they produce make fulfilling that fiduciary obligation hard.
A few inconvenient numbers: GLP-1’s are not achieving the weight loss endpoints promised by clinical trials. Somewhere between 12-20% of patients on dupilumab for atopic dermatitis are not experiencing any or a durable disease regression. Delandistrogene Moxeparvovec is a $3.2M one-time dose that failed to meet its primary endpoint in clinical trials and has been associated with two patient deaths.
Prior authorization was conceived to address exactly this type of low-value utilization that we are seeing more and more.
So, let me get this right? The prevailing strategy is – cut and run? Pay for everything anyway, and premiums climb – for everybody, including the patients getting drugs that don’t work for them.
Protecting patients from low-value therapy was exactly the job that PA was supposed to do. Make sure the right patient gets the right drug. Make sure the plan isn’t paying thousands of dollars for something that isn’t working. Protect the premium dollar so coverage stays affordable and care stays assessable.
So why abandon Prior Authorization?
Because legacy PA systems are slow, paper-based, opaque, and require too much clinician bandwidth. All this leads to denying care that should be approved and approving care that is/will not create value. Administrative costs of running legacy PA are enormous. So, when the political pressure gets hot, the path of least resistance is to retreat.
That’s not reform. That’s surrender.
What might “fixing it” actually look like?
You don’t cut PA. You rebuild it around the only two questions that should ever have mattered: is there evidence that this medication will work and is this medication actually working?
That means a few specific things:
Guidelines need to be written in outrageously objective terms. If you can’t translate your guideline into a machine-readable algorithm then it’s not objective – not a new set of rules, your rules in transparent and automatable format.
The process needs to approve and re-approve therapy. The drugs the FDA has been approving have “spotty” clinical end-point achievement, so the PA process has to evaluate longitudinal patient data against clinical endpoints at appropriate intervals. If GLP-s taught us anything it’s this.
“Gold card” the patients who are likely to move to PA’ed therapy. It is no secret that patients taking non-biologic DMARDs are likely to need biologic DMARDs at some point. Why frustrate members at the point of service? Why not proactively recommend advanced therapy when their condition requires? Fast-tracked, not friction.
Legacy therapy is not good care. Get the patients who aren’t responding to an ineffective therapy onto something that might actually help.
Done that way, PA stops being a wall and starts being a feedback loop. Approvals are evidence-based and transparent. Denials are explainable. Members on therapies that work see less administrative burden, not more. And the plan stops paying for outcomes that aren’t happening.
This is the platform we built at Ethicos Health
Not because we’re anti-prior authorization. Because we’re for it – done right. Our AI-enabled platform transforms prior authorization into a clinical efficacy assessment process. Our platform turns a payer or PBM’s own clinical guidelines into automated, continuous evaluations of whether a therapy is working for each member and conserves your PA staff’s valuable time. For GLP-1s alone, plans using the platform can hit a 25:1 ROI by eliminating ineffective or inappropriate high-cost prescriptions. Similar economics extend across the rest of the therapy landscape.
This is what reform looks like.
The bottom line
Walking away from PA isn’t a win for patients. It’s a payer with a fiduciary duty announcing the work is too hard, so they’ll stop doing it. Premium dollars will get spent on therapies that don’t work. Costs will rise. And in five years, when somebody notices, we’ll be reading the next round of headlines about “out-of-control specialty drug spending.”
The job was never to quit. The job was to fix it.
If you’re a health plan, PBM, or self-funded employer who is tired of choosing between abandoning the post and keeping the broken system, come talk to us. There’s a third option, and we built it.
— Jim Notaro, Co-Founder, Ethicos Health
contact@ethicoshealth.com