Prior authorization started out as a means by the “payers” of health care goods and services to provide patients the assurance that what their doctors order is medically necessary and appropriate. A strong argument could be made that there is a legitimate role for prior authorization in some circumstances, but big insurers not only have used it to avoid paying for necessary care, but they–and a cottage industry of consultants representing health care providers–have also figured out how to profit from the process. As a consequence, an enormous amount of the money we spend on health care is all too often being used against us, endangering our lives. Below, an executive who ran a prior auth shop pulls the curtains back to explain how it really works. To help the writer avoid potential legal and career problems, we have agreed to publish the piece anonymously.
And these companies are all practicing medicine without a medical license. The quickest way to get approval for something is to ask for the NPI of the doctor practicing medicine. They can't give it, because it doesn't exist.
Love this: "We can tell clients who provide insurance that we denied 15% of the requests that came in the door last year, and if we cut out 15% of your costs on certain claims, it would save you $2 per member per month. Well, we're only going to charge you 50 cents per member per month — what a bargain! "
Andrew Tobias wrote a book on the entire insurance industry decades ago called "The Invisible Bankers." In it, he suggests every insurance policy have a disclaimer saying, "This insurance policy, on average, pays XX cents on the dollar to buyers of the policy."
Prof. Mariana Mazzucato points out the difference between Value Extraction and Value Creation in the video linked below. Clearly this is Value Extraction with no added value creation!
In a talk titled "We Need To Question The Economic Stories We've Been Told," economist Mariana Mazzucato discusses the importance of examining the concept of value in economics and how it is created and extracted. She argues that without a clear understanding of value creation, we risk allowing value extraction to masquerade as value creation, leading to a distorted perception of productivity and value in the economy. Mazzucato suggests that we need to consider what areas of the economy are productive and unproductive in order to steer activities towards value creation, and calls for a rethinking of how we measure productivity and value in different sectors.
And these companies are all practicing medicine without a medical license. The quickest way to get approval for something is to ask for the NPI of the doctor practicing medicine. They can't give it, because it doesn't exist.
Love this: "We can tell clients who provide insurance that we denied 15% of the requests that came in the door last year, and if we cut out 15% of your costs on certain claims, it would save you $2 per member per month. Well, we're only going to charge you 50 cents per member per month — what a bargain! "
Andrew Tobias wrote a book on the entire insurance industry decades ago called "The Invisible Bankers." In it, he suggests every insurance policy have a disclaimer saying, "This insurance policy, on average, pays XX cents on the dollar to buyers of the policy."
It's still a great idea!
Prof. Mariana Mazzucato points out the difference between Value Extraction and Value Creation in the video linked below. Clearly this is Value Extraction with no added value creation!
Here’s the video link: https://www.youtube.com/watch?v=J7ZSWcDWLnI
Here’s the Chat GPT summary.
In a talk titled "We Need To Question The Economic Stories We've Been Told," economist Mariana Mazzucato discusses the importance of examining the concept of value in economics and how it is created and extracted. She argues that without a clear understanding of value creation, we risk allowing value extraction to masquerade as value creation, leading to a distorted perception of productivity and value in the economy. Mazzucato suggests that we need to consider what areas of the economy are productive and unproductive in order to steer activities towards value creation, and calls for a rethinking of how we measure productivity and value in different sectors.