Doctors Bear Burden of Prior Authorizations
While prior authorizations allow the system to benefit from cost savings, dealing with authorizations eat up an ever-growing amount of physician time.
- Administrative costs are estimated to make up between 1/5 and 1/3 of U.S. healthcare expenditures.
- Doctors' efforts result in nearly 10x return in terms of savings to the system, but those savings accrue to Medicare, not to physicians.
- For prescription drugs, large cost savings come from shift to cheaper substitutes.
Sources
Brot-Goldberg ZC, Bur S, Layton T, Vabson B. Rationing Medicine Through Bureaucracy: Authorization Restrictions in Medicare. National Bureau of Economic Research. Accessed September 11, 2023.
Vabson B. Prior Authorization Reduces Net Costs of Medicare Part D. AEI. Accessed September 11, 2023.
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