Prior authorizations, past and present with Archelle Georgiou, MD

Dr. Archelle Georgiou sat down with me to chat about the topic of prior authorizations, both lessons learned from her experiences in managed care in the 1990s and how they apply to the current landscape. It’s a fascinating journey into the history of prior authorizations and how UnitedHealthcare led an industry movement in the late 1990s to remove all prior authorizations. We discuss what led to that move, how the industry has evolved over the last 25 years, and how an approach focused on care management may yield better results than prior auths.

First, a quick background on the topic from me, then the interview.

One of more interesting topics of conversation in DC over the past few months is that of prior authorizations. As most folks reading this will already know, earlier this year CMMI announced the The Wasteful and Inappropriate Service Reduction (WISeR) Model, an effort to curb wasteful spending in Traditional Medicare using AI/ML to implement a streamlined prior authorization process targeted at a few specific areas of healthcare spending that seem wasteful on their face.

So when the model was announced, my initial reaction was that this model seemed like a no brainer. Given the challenges that CMMI models have had in proving cost reductions, this seemed like a breath of fresh air. Needless to say, I’ve been surprised by the level of pushback since the model was announced, encapsulated in the letter from 38 members of Congress to Dr. Oz and CMMI director Abe Sutton. I’d categorize the pushback I’ve heard (both in that letter and more broadly) in three forms:

As so often is the case, I’ve found myself looking to the past to learn about the present we find ourselves in. And what I think may be surprising to many folks who started working in healthcare after the 1990s, is that the current conversation has many parallels to the backlash against HMOs in the 1990s. The backlash in that era prompted UnitedHealthcare to make a bold move in 1999: it removed all prior auths.

This decision generated much national fanfare, as demonstrated in this YouTube video (which also hapepns to include some pretty amazing 1999 vibes):

Dr. Archelle Georgiou, who was the Chief Medical Officer of UnitedHealthcare at the time, was generous enough to sit down with me and talk through some of the learnings from that experience and how it applies today. I learned a lot from the conversation with her, in particular the relatively counterintuitive starting point for the conversation to remove prior auths internally at UHC — it needed to drive medical cost savings. In an industry today, where prior auths are synonmous with insurance bad behavior to save dollars, it’s an interesting concept to think that removing prior auths could actually save money for insurers.

I left the conversation thinking a lot about how to apply the learnings from the past to the current state we’re in. Back to the conversation about WISeR that was the genesis for this conversation, it has me thinking a lot more about the tradeoffs of implementing such a model. I also can’t help but wonder if an insurer could make the same case today that Georgiou did 25 years ago in removing all prior auths, both as a way to shake up the industry, but also to improve bottom line performance for a payor.

It’s an intriguing thought. Enjoy the full interview!

0:00: Introduction to the Topic

1:28: The HMO Backlash of the 1990s

4:15: UnitedHealthcare’s 1999 policy to remove prior auths

9:17: The counterintuitive elements of UHC’s decision

15:45: The merits of prior notification compared to prior auths

19:31: The reintroduction of prior auths in the 2000s

21:00: A conversation about WISeR

24:34: is AI making prior auths worse?

27:21: The pillars of managed care

29:02: The need to have a national conversation about what Medicare covers

31:22: GLP-1s, employers, and prior auths versus care coordination

36:02: The cost of biologics and role of care management

37:35: Texas suing Eli Lilly for providing care management supports

41:11: Recommendations for health plan leaders moving forward

42:23: are health plans too big and complex today?

47:35: Recommendations for health policy leaders moving forward

Here are links to items we discussed / referenced during the conversation: