Prior Authorization

HIMSS Clinical Informatics Insights

The number of prior authorizations for medications is small.  Only about 5% of prescriptions require prior authorizations.  This small thing has a Big Impact, both positive and negative.  It is also prime for HIT disruption.

This small thing is out of control.  Prior authorization is still 90% paper and phone based.  It is time consuming, chaotic, and sometimes even an irrational process.  As a pharmacist in charge of adjudicating prior authorizations, I was called into my boss's office one day.  It turns out, I was approving too many prior authorizations for asthma inhalers.  Many of the calls I received were for children and adolescents who had misplaced their inhalers. As someone that cannot find his keys on a regular basis, I had a fair amount of empathy for their situation. It is reasonable that kids can misplace their inhalers. So I asked my boss whether the cost of an inhaler outweighed the cost of an ED visit.  The response was that we were responsible for controlling the drug budget and the medical data on this issue was not available. The potential for a big impact is clear. 

A survey by Surescripts indicated that 28% of physicians would change EHRs if there was a function that fixed the prior approval process.  What is striking is that this single piece of functionality would motivate almost a third of physicians to change EHRs.  Big impact. 

Another canary in the coal mine of things to come is the hepatitis drug treatments.  One therapy at $1,000 a pill and $80,000 per treatment is sending shock waves through health plans and pharmacy benefit managers (PBMs).  One PBM recently came out to indicate they will not pay for this expensive treatment but only pay for a more complicated therapy to administer, that was financially more advantageous to the PBM.  The evidence of clinical effectiveness of one therapy over the other that will emerge over time is going to be interesting, and have a Big Impact.

The prior approval process is the next major process in healthcare to be disrupted with technology.  With more specialty pharmaceutical therapies addressing complex diseases, striking a balance between financial responsibility, provider workflow and sound clinical evidence is needed. Look for this big impact on individual heath, insurance providers, health providers and EHR use to emerge from this relatively small thing.

About the Contributor
Most recently Dr. Poikonen was a Visiting Professor at UMass in Health Informatics.  He has spent his career split between clinical pharmacy and informatics including being Director of Ambulatory Pharmacy and Director of Clinical Informatics at UMass Memorial Health Care.  His experience also includes being Pharmacy Director at MedVentive (now McKesson), medication safety pharmacist at Partners Healthcare and Product Manager with Eclipsys (now Allscripts) and Cerner.