A real solution for the prior authorization problem

Ari Hoffman: ©Collective Health

Insurance companies' recent pledge to reassess how they use and implement prior authorizations (PAs) sounds promising when you consider the urgent need for reform—but as a physician, I approach these announcements with a healthy dose of skepticism.

We've heard these promises before, like in 2018, when insurers and medical groups agreed on new PA practices, yet little progress was made.

We need to fundamentally transform utilization management to a relentless focus on helping people find the care that is most appropriate and cost effective. The discussion about “fixing prior authorization” misses the point that PAs themselves are the wrong tool for the job of utilization management much of the time because they deliver immediate cost cutting for plans but at great financial and human costs.

The ongoing struggle with prior authorizations

We’ve all seen or experienced it ourselves: ongoing denial letters, years of frustration, and forced treatment abandonment for too many patients. Countless stories reveal the pitfalls of PAs: why they don’t work, how they can hurt patients, and the friction they cause in providers’ offices nationwide.

The practice of utilization management—which includes PA—is supposed to ensure the right treatment reaches the right patient under the right circumstances. While these goals are laudable, the goal of PAs (and certainly the impact), in many instances, has been deeply distorted. They are now largely seen as barriers to care, tools to deny services and drive profits for large insurers.

Imagine a patient battling advanced cancer, suffering from excruciating pain. Their palliative care doctor prescribes a common, inexpensive generic opioid, only to face a prior authorization request. Yes, even for end-stage cancer patients, under a specialist’s care, for generic pain medication.

A good friend of mine, a dedicated palliative care leader, recently shared a telling sign of this broken system: his practice, focused on easing suffering, was forced to hire a full-time employee solely to manage the relentless volume of prior authorization requests, appeals, and denials. What started as concern for patient safety has morphed into bureaucratic overwhelm, breeding immense dissatisfaction and diverting resources from actual care.

Misaligned intentions and outdated practices

Utilization management (UM) should be about ensuring appropriate care, but too often has defaulted to convenience over nuance. Instead of doing the hard work of assessing true appropriateness, we’ve come to rely on a blunt instrument: prior authorization, or too often, prior denial.

It's designed to get in the way of anything expensive, often without discerning true need or value.

This is particularly frustrating when I think about my friend's hospice patients, who face unnecessary hurdles for essential medications. Opioid prescribing demands caution to mitigate against the type of prescribing that helped fuel the opioid crisis in America, but blanket policies focused on specific procedures or services overlook a core tenet of good medicine: appropriate care requires careful matching of what’s available to a specific patient’s needs. The same opioid as first line treatment of pain related to a muscle spasm is malpractice, but we can’t make a policy that covers all permutations.

As a result, targeting opioids provided by palliative care for end-stage cancer patients is a classic example of misdirected energy—neither impacting appropriateness nor cost containment meaningfully.

Moreover, as medical breakthroughs accelerate, utilization management too often lags behind, falling short in guiding appropriate care.

The myopic view of "savings"

Adding to this issue is the oversimplified way we currently measure “savings” in utilization management. The industry standard remains tallying denials and multiplying them by the average cost of the denied service.

This math may be actuarially correct, but it's incredibly myopic. It completely ignores the number, emotional impact, time lost, and the ripple effect of these denials, but also the overwhelming volume of PAs that are approved that still create costly, unnecessary delays and friction in care.

I have seen firsthand how denying necessary services can lead to delayed care, worsening conditions, and ultimately, far more expensive emergency room visits or hospitalizations. That “denied” outpatient service now pales in comparison to the vastly more expensive, often preventable, downstream care.

Embracing the opportunity in a data-rich world

In today's world, blunt instruments like PA disserve not only patients and providers, but the payers as well. We have the tools to do better—by leveraging technology for good, we create opportunities to improve the member health care experience.

What if insurers truly knew their members? Not just their demographic data, but their unique health journeys, and their risks. Imagine leveraging sophisticated data and predictive analytics to anticipate their needs, rather than react to them. What if, instead of standing as a barrier, we could proactively guide members. What if we could use data to help them select the most appropriate providers, to understand the most effective and cost-efficient care options, even when they're just beginning to search for care.

This isn't science fiction; it's within our grasp. Imagine knowing when someone is searching for a particular type of care and being able to intelligently match them with the most appropriate and cost-effective benefits from their entire health ecosystem, all in one place. This starts to transform the experience from a frustrating maze into a clear, supportive path.

The "left shift" solution

This is the 'left shift' in health care. It means moving appropriateness away from bureaucratic checkpoints after a decision is made, and instead embedding it at the very beginning of the health care journey—at the point of searching, accessing, and receiving care.

This paradigm shift benefits everyone.

For members, it means less friction, clearer pathways, and better health outcomes. For employers, who pay a substantial share of health care costs in this country, it translates to genuine cost containment rooted in true value and smarter resource allocation, not just arbitrary denials.

For the entire health care system, it fosters a focus on prevention, personalized guidance, and trust, fundamentally improving the quality and efficiency of care.

A call to action for a new future

We’re at a crossroads in the health care industry, as we face rising costs and increasing frustration from providers, members, and patients. It's no longer enough to tweak the edges; we need a fundamental reimagining: this isn't just about efficiency, it's about restoring trust and dignity to health care.

We must demand a future where appropriateness is proactive, data-driven, and truly integrated into every step of the health care journey. A future where human-centered design and intelligent technology replace bureaucratic blocks, ensuring that every patient receives the right care, at the right time, without unnecessary obstacles. By prioritizing human interaction and seamless integration, we can set a new standard for how utilization management can function—and transform it to be the viable solution we need.

Dr. Ari Hoffman’s career is marked by a strong commitment to health policy and value-based care. He has extensive expertise in broader health care systems and value improvement, which he has brought to the forefront of Collective Health’s mission to enhance the healthcare experience and make it more affordable as its Chief Clinical Officer and SVP of Product. In addition to his role at Collective Health, he maintains an academic position at UCSF and continues to practice clinically, underscoring his belief in remaining grounded in patient care.