Do Commercial Health Plans’ Policies Compromise Patient Safety and Raise Costs?

Much has been written about the necessity of reducing medical costs through contract changes and rate negotiation, yet there is a strong argument to be made for scrutinizing the rising costs due to policies and procedural barriers insurers impose on hospitals and healthcare providers. Every story has multiple perspectives, and this matter is no different.

The 2022 American Hospital Association whitepaper questions and illustrates how certain programs and policies not only escalate costs for hospitals and health systems but also significantly affect patient well-being. For instance, the AHA report mentions, "Many health plans implement prior authorization requirements that dangerously delay care, lead to clinician burnout, and substantially increase administrative expenses for the healthcare system." If this resonates with you or your client, it's worth assessing and comparing the health insurer's prior authorization practices and their effect on patient satisfaction. The whitepaper also notes, "Insurers frequently compel patients to endure ineffective treatments before allowing access to the most suitable therapy" and "Insurers often establish flawed or excessively stringent medical necessity policies that prevent patients from receiving the care their physicians advise." These statements raise concerns from the patient's perspective, such as whether these policies impact plan members and if a stringent focus on costs diminishes employee satisfaction or leads to higher expenses elsewhere. These are the kinds of questions that perceptive consultants and advisors should ask their insurers.

Although our industry lacks a simple solution, the valuable insights provided by industry associations and thought leaders can enhance the conversation, yielding a diverse set of responses than previously available. I encourage benefits decision-makers and consultants to give due consideration to the whitepaper. Whitepaper: Commercial Health Plans' Policies Compromise Patient Safety and Raise Costs (2022)