The problem with prior authorization

Prior authorization is a requirement that health plans require physicians to obtain plan approval in order to prescribe a patient a given medication. Prior authorizations may be put in place to insure medications are not used inappropriately or for payers to try to reduce cost. While prior authorization may help save money, delays in the…

Those greedy insurance companies?

Health insurance companies are not spending as much money as expected. While COVID-19-related costs are up, the cost savings from people foregoing or delaying elective care has more than offset the COVID costs. Health insurers are refunding much of that savings to their enrollees. However, this is due to a provision of the ACA that…

Accountable Pharmacy Organizations?

Pharmacists are typically paid for dispensing drugs. They receive a fee to cover the price for acquiring a given drug and a dispensing fee. In general, however, pharmacists are not paid based on patient outcomes. Will that change? Troy Trygstad (2020) argues that value-based reimbursement for pharmacists through accountable pharmacy organizations (APOs) may be the…

Are COVID-19 tests free?

The answer should be ‘yes’. From an economist’s perspective, prices for goods and services should generally be set at marginal cost unless there are externalities. In the case of COVID-19, there are clear externalities. By finding out that someone is COVID-19 positive, one could not only treat the patient (not an externality) but also the…