UNITEDHEALTH: Ends Pre-authorization, Gives MDs Final Say
Effectively "giving up on a fundamental principle of managed care," UnitedHealth Group has announced it will let physicians make the final decision on what treatments their patients receive, rather than reviewing and denying questionable medical services. The landmark decision could have huge repercussions on the managed care industry and render the right-to-sue debate moot, the Dallas Morning News reports. Officials at the nation's second-largest insurer said the company spends more to review and deny unnecessary treatments than it saves through such denials, so it will end the practice of requiring pre-authorization for certain treatments and focus instead on monitoring and improving physician performance. Industry analysts expect the decision to place "enormous pressure" on other insurers to follow United's example.
Getting Out of MDs' Way
United, which covers 14.5 million people, spends $100 million a year on its review process while approving 99% of treatment requests, said Dr. Archelle Georgiou, the company's chief medical officer. Eliminating pre-authorizations allows the insurer to reduce its medical monitoring staff by 20%, while the remaining members of that staff will shift their emphasis to a new program called Care Coordination. Under the new system, physicians still must notify United when a patient is admitted to the hospital or requires expensive medical equipment or home health care. The insurer's staff may request more information or suggest alternative treatments that cost less, but the physician will have the final say on what is necessary. United will track quality of care and cost-effectiveness for each physician and offer help to those who perform poorly. The insurer may eventually publish such information on individual physicians or use it to determine which doctors should be expelled from the network, Georgiou said. United's staff also will work with patients who are chronically ill, preparing for hospitalization or recovering from surgery, to help them understand their care and maximize its benefits. After it began testing the system last year in Tennessee, United reduced its expenses there by 8%, Georgiou said. The company has been using the system since April in six locations, and will now expand it to the national level.
A 'Fundamental Tenet'
United's change of course marks a major shift in managed care's approach to controlling costs, analysts say. It shows that insurers can save money without "rationing" medical care or intruding on the relationship between doctor and patient. It also addresses one of the most vexing issues surrounding managed care, as the debate over consumers' right to sue HMOs for malpractice for delaying or denying needed treatments may be rendered moot if other insurers adopt United's strategy. A recent survey of managed-care firms suggests that at least some may be moving in the same direction: It found that insurers are reducing the number of procedures for which they require pre-approval, indicating increased trust in physicians' judgement (Ornstein, 11/8).