In 2018 there were over 182 million prior authorizations conducted nationally according to the alliance of health plans called the Council for Affordable Quality Healthcare (CAQH). That same year, Health Affairs reported that $54 billion of medical spend was challenged by insurance companies. After that level of scrutiny and approval seeking, it is remarkable that so much spend is still disputed. Clearly the level of friction and frustration in the healthcare system is damaging to all involved and promises to be dramatically re-architected by innovative new technologies.
According to the political advocacy group America’s Health Insurance Plans (AHIP), less than 15% of all healthcare products and services even need prior authorization (PA). Of the 182 million interventions, only 23 million were fully automated; the balance either included some level of automation or were entirely manual. An analysis by the American Medical Association concluded that 73% of providers wait on average of at least one day for approvals (21% wait between 3 – 5 days). Tragically, 28% of providers reported at least one severe adverse event due to PA delays.
Overall, the CAQH estimates that $350 billion is spent annually on healthcare administrative costs, of which PA is around $25 billion. Nearly 20 years ago, it was mandated that PA needs to become more automated. The CAQH posits that $102 billion has been saved through (partial) automation of this administrative function and that there is another $13.3 billion of savings readily identifiable with further automation. Across the many PA steps, the (Read more…)