California Needs A Common-Sense Approach to Health Care Cost Containment

May 14, 2011

By Dr. Bill Releford

As California continues toward implementation of federal health care reform, efforts to contain health care costs have become increasingly critical, and all parties to the health care delivery system share responsibility.

California health insurers, however, have implemented many procedures and protocols under the guise of cost containment that threaten the doctor-patient relationship and interfere with effective patient care by denying or delaying patient treatment.

These practices carry innocuous-sounding names, such as “prior-” or “pre-authorization,” “pre-approval,” or “step edits,” but the impact can be anything but innocuous.

Prior- and pre-authorization policies – when an insurer requires a doctor to obtain authorization from the insurance carrier before the carrier will agree to cover the cost of medication or treatment – deliver costly bureaucratic hassles that take a physician’s time and attention away from patient care. The fact that each health plan has its own distinct form only compounds the problem and adds to the time physicians must spend navigating the managed care maze in order to get patients access to the treatments they need.

Physicians can spend up to 20 hours per week on average just dealing with pre-authorization requests, and studies have shown the costs to physicians can reach $23.2 to $31 billion a year. Pharmacists also find prior authorization time consuming, spending an average of 4.6 hours a week on requests.

The American Medical Association recently released a membership survey on prior authorization which found that 69% of physicians typically wait several days to receive preauthorization from an insurer for drugs, while one in ten wait more than a week. Additionally, 67% of physicians reported that it is difficult to determine which drugs require prior authorization by insurers.

A recent survey of pharmacists found that 61% of pharmacists knew of an incident when prior-authorization requirements adversely affected patient care.

The problem is even more acute in minority and low-income communities, who are often in a more vulnerable position when it comes to dealing with the health side effects and additional financial costs of a delayed treatment process.

African-American communities in California, for example, consistently lack access to medical care, receive lower quality treatment, and must increasingly battle with health insurers intent on denying them the newest, most effective medications. The result of this unequal treatment is a large-scale health disparity that threatens the well-being of the African-American community.

African-Americans suffer higher rates of chronic ailments such as diabetes, cancer and heart disease than their Caucasian counterparts. African American adults are more than twice as likely as Caucasians adults to be diagnosed with diabetes or suffer a stroke. The Agency for Healthcare Research and Quality found that, for three quarters of health care quality “core measures,” African Americans received lower quality care than Caucasians.

For all California communities, but these at-risk communities in particular, the unnecessary delays that the prior authorization process creates can mean shorter, less productive lives for patients.

California needs common-sense solutions to ensure that patients will not continue to needlessly suffer because insurers have implemented short-sighted, cost-cutting measures that limit the availability of treatments.

Dr. Bill Releford is the founder and CEO of the Black Barbershop Health Outreach Program based in Los Angeles, California.

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One Response to California Needs A Common-Sense Approach to Health Care Cost Containment

  1. NorCalCS

    May 16, 2011 at 11:03 am

    Very interesting article… something that I was not entirely aware of.

    I would add that another problem with our current health care reform legislation is that it limits the type of care available by offering predominately (if not exclusively) medical options. Religious nonmedical care – which has for years been included in many government insurance programs including Medicare, Medi-Cal, the Federal Employees Health Benefit Program, and the California Public Employees Retirement System (CalPERS) –is not even mentioned. It seems to me that any benefit afforded to the elderly, the impoverished, and the government-employed should be provided to everyone else in the middle – those who are now required to buy health insurance or face a stiff financial penalty.

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