Merry Christmas From Your PBM

 

After some deliberation I went into my local Walgreens for an RSV immunization.  I have multiple unpredictable allergies and have had both anaphylaxis and significant local reactions to vaccinations in the past. Like 20% of the population, I have eczema and there is some research on flareups of this skin disease with vaccinations.  And like many people with eczema, I also have asthma and had a severe flare-up of asthma when I got a viral infection on a flight back from Alaska about 5 years ago. My primary care physician recommended it last week so I scheduled it.

As I was sitting there waiting for them to prepare the shot, I was able to observe patients coming and going to pick up their prescriptions. This is a busy Walgreens and there are people going past the drive-up window as fast as they are showing up in line.  Most people at there in the early afternoon are retirees.  There was an informal retirement poll of the old guys in line and it was unanimous – we were all quite happy to be retired. The people gathered were upbeat. I recalled being at a 24-hour pharmacy in 2002.  My late father-in-law was visiting and forgot all his cardiac medications.  I went over at midnight to pick them up and it was an ugly scene.  There were about 60 people there and the pharmacist was not filling the prescriptions fast enough. From where I was seated – I could see him working furiously.  The crowd was so agitated about this it seemed like they were ready to riot. If that wasn’t enough a rather cranky lady sitting next to me started to goad them and call them names.  Luckily, I got the medicine and got out of there as soon as possible.

 The atmosphere today was much better – but like most scenes in American health care it was far from perfect.  There were no simple transactions. In the transactions I witnessed, very few people walked away with the prescription medication ordered by their doctors. The most common problem as a lack of prior authorization. People were advised that their doctor had to get the prior authorization. Several were advised that they needed a new prior authorization. I remember all the messaging that people hear when they need a prescription refill.  Call your doctor’s office.  Don’t call your doctor’s office.  Call the pharmacy.  Don’t call the pharmacy.  Today 75% of that messaging was incorrect.  And it wasn’t like the medications were an option.  Antihypertensives, diabetes medications, prostatic hypertrophy medications – every medication name I heard had me hoping these impasses would be resolved as soon as possible for the patient’s sake. The related quality issue is that most of these medications were maintenance medications and yet they required reauthorization – in some cases just because of an insurance change.  I didn’t see anyone get hit with the Medicare Donut Hole. I have been twice in the past 3 months with a copay for apixaban ballooning up to $400 or roughly 7 times the usual amount just because of the way the rules are written to favor pharmaceutical companies and pharmacy benefit managers (PBMs). I am sure it would have happened if I had been there longer.

But 20 minutes was up and I did not have an anaphylactic reaction. Another immunization I can take.  I jumped in my car, turned the radio on, and thought about what I had just witnessed.  I am certainly no stranger to it. As a physician I have been harassed by PBMs.  They put me on hold for hours only to eventually connect me with a clerk with no medical training or credentials that would either approve or reject my recommended prescription.  PBMs are not some quality improvement project – they are patient and physician harassment to see who blinks first and loses the time and money.  They are multibillion dollar companies that add to the cost of medications rather than reducing the cost.

Overall prescription drug pricing in the United States is much higher than in comparable countries both on an overall basis and a brand name basis.  A study (1) that looked at 2018 data showed that all drug pricing ranged average 258% higher than comparable drugs purchased in Mexico, Canada, France, Germany, Italy, Japan and the UK.  Comparable brand name medications averaged 344% higher.  All of that translates to much larger copays for Americans and often an inability to purchase the medication. I saw that happening a lot today.

Advocacy from the physician side has been weak. After decades of no action on the prior authorization issue some professional organizations are now saying that it needs to be controlled. The problem with that position is that it is so ratchetted down on patients and physicians that any controls in the right direction will be trivial.  The only solution is to eliminate prior authorization completely. If pharmaceutical companies want to deny payment for prescription medications – they can do it directly without using the physician and pharmacist for cover. Beyond that the appeal can go through a state administrative authority independent of the pharmacy business.

I have written extensively in the past about the sheer amount of resources that are wasted on prior authorization and the associated pharmacy rationing strategies.  I have written about how pharmacists take a significant hit and their professionalism is adversely affected by poor PBM reimbursement and conflict of interest – especially when the PBM owns their own chain of pharmacies. Today as I was waiting for clearance after an immunization it was all about the human cost.

That never seems to get better, although the Obama and Biden administrations have provided some significant relief to Medicare recipients. Everyone involved would be happier if this system was just gone.

 

George Dawson, MD, DFAPA

Supplementary 1:  Additional inefficiencies - a couple of days after writing this post my wife got a text message that one of her prescriptions was ready and she could "pick it up after Sunday."  She asked me to pick it up on Monday because I was driving by the pharmacy.  I pulled up to the window and asked for the prescription and was told - "it is ready but you are one day early.  You can pick it up tomorrow." Not the first time that has happened.  The pick up rule seems to vary by PBM, insurance, and pharmacy but the automatic messaging obviously does not take it into account. Just another reason for going to the pharmacy and leaving without the prescription. 

 

References:

1:  Mulcahy AW, Whaley C, Tebeka MG, Schwam D, Edenfield N, Becerra-Ornelas AU.   International Prescription Drug Price Comparisons Current Empirical Estimates and Comparisons with Previous Studies.  Rand Corporation Research Report. 2021.

2:  Yetter DM.  Reprieve for Kentucky’s independent pharmacies is saving Medicaid millions.  Kentucky Lantern. October 5, 2023.  https://kentuckylantern.com/2023/10/05/reprieve-for-kentuckys-independent-pharmacies-is-saving-medicaid-millions/

This is the story of how Kentucky eliminated PBMs in their state and saved $283M in three years. 

Graphic credit:

Me - my wife reshot the photo.

An Excursion into the Psychiatric News - Blurred Lines Between Business and Professional Organizations

Psychiatry Eclipsed

Before anyone says that this is me going off the rails again - consider one small factor.  For over 30 years I have been paying the American Psychiatric Association (APA) significant amounts of money in annual dues.  Last year it was about $935.  During some of those years, I thought it might be useful to also donate to their political action committee and I gave them significantly more money.  All the time, I was expecting something to reverse the inexorable deterioration in the practice environment  and the rationing of mental health services.  During that time, I witnessed first hand the deterioration of psychiatric services in the state of Minnesota to the point that there is now a mandate that county sheriffs have priority in admitting their mentally ill prisoners to state psychiatric hospitals.  The psychiatrists in the state have no say in who gets admitted to these facilities or the severely rationed number of inpatient beds in the state.  The reason for professional organizations as I understand them is to speak for and advance the profession, support its members and advocate policies that benefit the people that interact with the profession.  In the case of psychiatry that is the patients that we treat, their families, and the larger society.  All I have to do is pick up a copy of the Psychiatric News to doubt that these mandates are very relevant anymore.

I will say in advance that in my assessment the APA does a fair job in terms of education and professionalism.  I have criticized them in this area in the past for not keeping the treatment guidelines up to date and relevant.  Subsequent to that there was a new guideline published.  Access to the educational materials is not contained in the membership dues.  A subscription to Psychiatry Online or the CME Journal Focus are additional charges as are CME credits for reading articles in the American Journal of Psychiatry.  There is also a CD version of courses and presentations at the APA Annual Meeting that is available for a significant cost.  The educational and professional materials are definitely available and some of them are first rate - but they do come at a price.

My biggest problem with the APA has been the total lack of rigor in countering the deterioration of the practice environment and in many cases seeming to directly participate in initiatives that are counter to the interests of psychiatrists and their patients.  Thumbing through the September 16, 2016 edition of the Psychiatric News provides some ready examples.

On page 1, there is a story Everett Appointed head of New SAMHSA Office.  The story is all about APA President Elect Anita Everett, MD assuming a new position as chief medical officer at SAMHSA - the lead federal agency for mental health and substance use treatment.  A direct quote from Dr. Everett: "Having a psychiatrist as a member of the leadership team at SAMHSA will enable psychiatrists to join other mental health and public health professionals in guiding the federal component of the nation's behavioral health systems."  My emphasis on behavioral health.  As far as I am concerned SAMHSA is a pro-managed care government bureaucracy - like most of them.  Secondly, there are plenty of psychiatrists out there who have been chief medical officers for managed care companies and I would challenge anyone to tell me why they are necessary and what they have accomplished.  Managed care companies tell psychiatrists what to do.  They are not interested in a reasonable practice environment, reasonable inpatient settings of even professional standards.  They are interested in cheap, rationed care by overworked clinicians.  I don't doubt Dr. Everett's qualifications or good intentions.  I don't think I am going out on a limb too far to say that she is going to be severely restricted by the current bureaucracy with a strong managed care bias.  That is not good for psychiatrists and it certainly is not good for patients.

The other story on page 1 seems worse - Are Psychiatrists prepared for Health Care Reform?  Yes and No.   I really can't think of a more nauseating term in the medical literature than health care reform.  I have been hearing those hot little words for the entire length of my career.  I heard them from the Clintons back in the days when Hillary Clinton headed up the health care reform efforts during the first Clinton presidency.  Some students of the topic like to recall that for one reason or another the initiative worked on by Hillary Clinton was not successful.  I think that depends on the standard.  There certainly was no expected global program, but it did make managed care a household word and set managed care as the predominant bias in all further discussions of health care reform.  Like most history - people seem to have forgotten this and the Clinton administration (and all that followed) as having a strong managed care bias.  The article suggests that psychiatrists need to get on board with the collaborative care model - another managed care rationing technique.  In the span of 3 decades psychiatry has gone from protesting managed care rationing (especially because it affects us and our patients the most) to suggesting you really have to get on board with this.  The usual buzzwords like further workforce development and merit-based payment reforms are evident.  When professional standards are abandoned what is merit-based payment reform? In all likelihood it has to do with rationing techniques rather than quality medical care.  Paragraph after paragraph in this article read like a managed care playbook.  Maybe the only way to see through all of this pro management rhetoric is to have actually worked in one of these systems of care.  Try working in one with a manager who is reimbursed to extract the maximum amount of productivity while not providing resources to physicians in the system.  In that case I believe the management buzz word is creativity.  In a rationed environment there is often an audacious statement about creativity as a solution rather than additional personnel.  Most reasonable people would be shocked at what constitutes merit-based payment or the hold back procedures before you can get to that level.  Just another in a long line of meaningless cliches flowing from health care reform.

As you might imagine I was a little tense and clammy as I went on to page 2.  There I was an editorial piece by APA President Maria A. Oquendo, MD.  It was title Why 'Physician Heal Thyself' Does Not Work.  I was mildly optimistic that she might come to the same conclusion that I have about physician burnout - it is not a disease it is just bad management.  Dr. Oquendo began  with a description of the recent suicides of a psychiatric resident and a medical student.  She presents the epidemiology of physician suicide and suicidal ideation.  She points out for example that suicide is the second leading cause of death for physicians between the ages of 24 and 35.  She discusses the stigma of a psychiatric diagnosis and the gap between problems and who gets treated.  Her solution is self identification of depression and excessive alcohol use.  There seem to be other factors that are operative.  She quotes a six fold jump in PHQ-9 scores during internship - using that as a metric for depression.  I can't help but think how physicians and trainees are more isolated now than ever.  No matter what the setting we had great teams when I was an intern and resident.  We took care of one another and we had attending physicians who cared.  I addressed some of that in my previous burnout article.  Nobody discusses what it is like to train in a managed care and rationed environment today compared with medical care as usual in the past.  During my last stint in a hospital I did not see well developed teams anywhere.  Most of the senior physicians who did a lot of the teaching and tended to view themselves as affiliated with residents had been replaced by hospitalists.  Entire teaching services had been replaced.  Non-medical management has left many medical institutions very arid places with few personnel and limited collegiality.  That is exactly the wrong environment for depressed and stressed physicians.   Training programs everywhere can help residents by making sure they build collegiality and that team factor in all of their rotations.  They need to provide highly motivated faculty who have the interests of trainees in mind as a priority.  The teams I am referring to here are teams of physicians, not teams that contain administrative staff telling physicians what to do.

The article most directly related to managed care hegemony was "Medical Necessity in Psychiatry: Whose Definition Is It Anyway? by Daniel Knoepflmacher, MD.  The title is of course purely rhetorical.  Like many things in medicine today medical necessity has nothing to do with medicine.  It is a pure business definition designed to give the appearance of legitimacy to what is a pure business driven decision.  The decisions are made by people with no appreciation of human biology or its complexity.  They are people who seem to think that a lot of meaningless business metrics somehow apply to the practice of medicine.  At the worst (and most probable) they are simply rationing to make a profit.  I would call them nerds but I really don't think that they are that smart.

In the article, Dr. Knoepflmacher makes that point.  There is not even a standard business definition of medical necessity.  Companies can basically say and do whatever they want.  He traces the history of the term and how various groups define it today.  Interestingly one of the largest managed care companies states that it is for payment purposes only.  He points out the overemphasis on acute or crisis care rather than professional guidelines or standards.  I would argue that in psychiatry, managed care companies do a very poor job of addressing acute care by using only a dangerousness metric.  The term cost effectiveness is incorporated into some of the definitions in the 1960s.  The acclaimed Mental Health Parity and Addiction Equity Act of 2008 lacks any definition of medical necessity or a more useful definition of medical appropriateness.  That may explain why this legislation has had negligible impact.  Dr. Knoepflmacher's thesis can be best summarized in the sentence:

"Without universal medical necessity criteria for mental health care, clinicians and their patients are saddled with a concept highly susceptible to abuse by insurers."

I would take it a step further.  The abuse has been institutionalized at this point.  Clinicians find themselves abused at every fork in the road.  Any time a psychiatrist refills a medication for a colleague or because the treatment setting has changed they are subjected to abusive prior authorization processes that are in place purely to harass physicians into giving up and patients to the point that they are paying out of pocket instead of using the insurance they have paid for.   In that case Congress is directly responsible for erecting two multibillion dollar industries and inserting them between the physician and their patient.  I would also propose a much better limit than arbitrary medical necessity criteria.  It should be apparent that any managed care company can get around legislation and rules that they lobbied to pass.  I propose that physicians recommend a course of treatment to patients and that they are totally removed from the payment process.  No more wasting time with insurance company employee-reviewers.  No more conflict of interest in favor of big business.  The physician recommends treatment.  The insurance company tells the patient if they will pay for it.  Other than civil action by the patient, the only oversight should be a panel of physicians carefully screened for conflict of interest at the state level to mediate disputes (sorry no insurance industry insiders).

Highlighting these four articles creates a portrait of what is wrong with the APA.  Like other professional organizations it has clearly bought into the pro-management zeitgeist that is generally sold by American businesses and government.  The general idea is that there are business managers that know more about what you do and can tell you what to do - irrespective of your professional training and experience.  That idea is a mile wide and an inch deep.  Anyone with middle school analytic skills should have come to the same conclusion as Dr. Knoepflmacher - about 20 years ago.  His article is there now as a necessary reminder that there is a much better way to do things.  Instead of affiliating with these outrageous business practices - they should be actively resisted at every level.  That should include the practice and training environments.  There is nothing worse for physicians and patients than wringing the humanity out of medical practice.

And there is nobody better at doing that than current healthcare business managers.


George Dawson, MD, DFAPA



Attributions:  The graphic is all me.  It is supposed to represent a progressive overlap by government and business interests with the profession.  There are psychiatrists that work in the overlap areas and some who work just in the black and gray zones.  The field is still plodding along as though it is an autonomous profession.  

How Does The IOM Ignore The Single Most Important Conflict of Interest?

Another free 28 minutes of work for corporate America on their prior authorization procedure.  I won't type out the dialogue and arbitrary holds along the way.  This time I was referred by the pharmacy to one of the major Pharmacy Benefit Managers (PBMs) and after negotiating their queue and listening to about 15 minutes of pure nonsense (privacy notifications for veterans, Medicare programs, etc) I reached a human being.  At that point he advised me that the PBM was not responsible for this particular prescription and I had to contact their insurance company.  He gave me the number and connected me, but of course it involved a queue that had similar recorded messages and then had a difficult time understanding my voice saying: "I am a provider."  I eventually spoke with a human being who had to look up the circumstances that would allow her to approve the prior authorization.  She had no apparent medical training and the criteria that she was reading out of a book could have been applied as easily on the front end by a pharmacist to save me from 28 minutes of free work for a PBM.  And keep in mind this was one prescription that the patient had already been taking.

There is really no excuse at all for this ongoing charade.  At the same time professional groups like the AMA are not able to take any action that would alleviate this burden.  Managed care companies have institutionalized these rules in most states for decades at this point.  It was shocking when I first discovered that.  Look at the state statues and realize that rules stacked against you and your patients are the law.  The law mandates that you need to do all of this work for free for a managed care company.

Today,  I came up with a new idea.  Attorney Generals in the State of Minnesota have a record of activism against health care companies and unfair practices.  I decided to send a letter of my most recent experience with a PBM to the Attorney General's Office along with a copy of a letter I wrote as an opinion piece the Minnesota Medicine a few months ago.  That letter details how these practices disproportionately affect psychiatrists and patients with mental illnesses.  The proposed solution to the problem is a very simple one.  Instead of expecting physicians or their surrogates to endure a 28 minute telephone gauntlet in order to speak to a non professional who is unsteadily reading approval instructions out of manual - give that manual directly to the retail pharmacist.  The 28 minute call would evaporate into a 2 minute call or less.  Better yet, take the physician out of the loop entirely.  There is no way that a physician should collude with a business decision to make money for a managed care company.   If the company refuses the physician order, it should clearly be documented and the next choice should be made (if possible) and designated as not the optimal choice by the physician.

That brings me to the all important issue of conflict of interest.  You can read blogs all over the internet that discuss the issue of pharmaceutical company influence ad nauseum.  The Pharmascolds remain preoccupied with this issue and are apparently unable to see that businesses run according to business ethics (whatever that might be),  clinical trials of practically all drugs are imperfect and no matter how many repeat studies the Cochrane Collaboration wants that basic fact will not change,  and that the FDA is a flawed politically biased agency rather than the guarantor of drug safety.  These are some of the common fallacies that I see played out each day across a number of settings.  At any rate,  just based on the frequency of enraged posts any casual reader would think that this is a daily crisis.  The only significant variant is that physicians and psychiatrists in particular are blamed for the ethical shortcomings of both American businesses and government.

But when you get right down to it - what is conflict of interest?  It is probably useful to use existing definitions rather than my direct observations for the purpose of this post.  There is no more respected body than the Institute of Medicine.  They routinely publish books on health care policy that are widely quoted and their definitions carry some weight.  I don't like their entire conflict of interest policy because they equate the appearance of conflict of interest with conflict of interest.  Congress would probably also have an issue with that definition.  Their basic introductory definition from the reference at the bottom of this page is included in the table below:

  
To keep it simple let's consider the primary interest in this case to be the welfare of patients.  The secondary interests in this case are defined as:  ".... financial gain but also the desire for professional advancement, recognition for personal achievement and favors to friends and family or to students and colleagues.." (p. 47).  They qualify this by saying that financial gain is not necessarily bad and that policies reasonably focus on financial gains but:  "When a secondary interest has inappropriate weight in a decision and distorts the pursuit of a primary interest, it is exerting undue influence."  They go on to define the conflict as any set of circumstances that arises that does not necessarily compromise the primary interest of patient welfare but that merely creates a risk for doing so.

How does this apply to prior authorization?  Prior authorization certainly sets up a secondary interest.  In this case the interest is the financial well being of the managed care company or PBM and in the case of publicly held companies - their shareholders.  From the perspective of the physician the secondary interest is maintaining employment which is the worst case scenario of "professional advancement."  Most employers and insurance companies stipulate that in order to stay employed you have to actively participate in all managed care prior authorizations and utilization review.  I am sure that astute politicians will claim that these surrogates are necessary to control runaway health care costs.  That does not explain how one could come up with a new sets of businesses worth tens of billions of dollars that make their money strictly from rationing pharmaceuticals.  These are companies that arise out of thin air based on the questionable theories of politicians and business people.  It does not explain why they are currently in the business of rationing very inexpensive generic drugs.  It certainly does not explain how there is a direct correlation between managed care rationing and an over 300% increase in health care administrators in the industry.  And most importantly it does not explain the complete failure of the managed care industry to contain health care costs.  In short, anyone espousing the need for expensive administrator heavy systems to control runaway prescribing does not have a leg to stand on.  The secondary interest in this case is clear.  Prior authorization is there to make money for companies and make a lot of it and physicians are forced to participate.    

The second issue here is an interesting and important one.  Physicians don't have to be convinced by flashy ads, salespeople, free samples, or financial inducements.  They are simply coerced.  When their patients are standing in a Walgreens or CVS, they don't have the luxury of saying no or even putting it off until the next day.  A patient who they have seen and assessed needs a medication and something has to be done.  They have to jump through a managed care hoop in order to get the medication that they have already prescribed - paid for.  The only question is: "How high is that hoop?"    

When people talk to me about all of the pharmaceutical company influence and evil marketing practices I don't even blink an eye.  I would like to know how the systematic coercion of the professional judgment of physicians by for profit companies on a national scale is not a far bigger problem than trinkets and pizza from the pharmaceutical industry?  There is no bigger risk of compromising the primary interest of patient welfare.  Patient welfare is always secondary to financial interest of the company involved.  The only case where it is not is if the company agrees with the prescriber, but even then they have created strong disincentives (the gauntlet-like telephone queue) to the accomplishment of the primary goal of prescribing what the physician considers the best possible medication.

I would like to know how the Institute of Medicine can ignore this?           


George Dawson, MD, DFAPA

References:

IOM (Institute of Medicine). Conflict of Interest in Medical Research, Education, and Practice. Washington, DC: The National Academies Press; 2009.

Supplementary 1:  I consider the quotes from the IOM reference to be fair use under the US Copyright Law.

Scourge Of Prior Authorization Finally Acknowledged?

A copy of Minnesota Medicine, the journal of the Minnesota Medical Association (MMA) was delivered to my office this morning.  I stopped paying dues to the MMA about 20 years ago.  My rationale was that I was already paying significant dues to two professional organizations that were doing nothing to protect me from the repeated abuses of the managed care industry - why pay a third to do an equally poor job?  I was probably more steamed at the MMA at the time because I realized that managed care in Minnesota was more than just an annoying business practice, it was institutionalized in both the statutes and administrative practices of the state government.   I sent the President of the MMA a letter to that effect.  I don't have his response but it did not persuade me to send them another check.  I can only guess that this is a marketing idea to persuade the disaffected that the MMA is now a vital organization that appreciates medical practice in the state in many cases has come perilously close to being a living hell.  That living hell is courtesy of managed care and the various heads of that hydra.

Despite those reservations, on the front page just below the journal title was this headline:  The Prior Authorization Burden and just below that the subtitle: The process is frustrating, time-consuming and costly.  No kidding.  Any casual reader of this blog may recognize that this is probably one of the only sites where you can count on rigorous criticism and aggressive opposition to all managed care techniques.  At the top of that list is prior authorization.  I have gone as far as coming up with a "no-Rx" logo that I use to symbolize the problem.  That symbol is at the top of this post. It means that a managed care company (MCO) or pharmaceutical benefit manager (PBM) can deny prescriptions and therefore medication to the patient.  That denial is also a denial of the prescription of the physician and everything that involves.  State and federal governments have granted these organizations this power based on some loose idea that it would save patients and the governments money.  These governments are still enamored with that idea despite the overwhelming evidence that money is not really saved, it is merely redirected to the bottom line of MCOs and PBMs.  The only people who pay the price are patients and physicians.

So my first and primary question was "Does the medical society finally get it?"  They certainly missed the boat on utilization review and as a result managed care organizations in Minnesota generally make the discharge decisions on patients.  Will they also continue to make decisions about what medications can be prescribed based on their profit margins rather than what a physician in a treatment relationship with the patient decides?  The initial example seemed hopeful.  It was the story about a primary care physician trying to prescribe a rescue inhaler for his asthmatic patient.  He had taken a specific brand of generic albuterol for years.  The prescription was rejected.  He wrote subsequent decisions for identical medications in the same category Proventil and that was rejected.  He sent in a script for ProAir and that was rejected.  He was told to choose another inhaler but not given a name to choose.  He picked Xopenex or levalbuterol rather than albuterol and that was accepted.  What is the rationale for a PBM having a doctor guess about which inhaler will be approved for days while a patient with severe asthma goes through the weekend without a rescue inhaler? In a word money, the only rationale for picking a newer and (usually) more expensive inhaler is that the PBM has some kind of financial deal with that manufacturer.

 The article does go on to explore that theme and references a study of six Minnesota Health Plans.  The researcher Barbara Daiker, RN, PhD found that there were 1,036 drugs that required prior authorization but only 6 were on the prior authorization list of all 6 health plans.  Only 26 more were on 5 of the 6 lists.  This level of variability suggests that the decisions are not based on scientific evidence or quality concerns but financial models.  It would have been very useful to know if any of these lists included generic drugs. Without a scientific or quality basis for these lists, the obvious model is a purely financial one.  That is also consistent with the tactics used by these companies that I have documented in this blog such as refusing to cover generic antidepressants that can be purchased for as little as $4.00 per month.

One of the facts about prior authorization is that  like most managed care tactics, the burden has fallen disproportionately on  psychiatric practice and patients with mental illness.  One of the first articles demonstrating the adverse effects of prior authorization was published in the New England Journal of Medicine in 1994 (2) showing that when prescription limits were imposed on patients with severe chronic mental illness it resulted in increased health care costs that exceeded the savings in medication by a factor of 17.  In a more recent study, Driscoll and Fleeter (3), estimated the adverse effects (hospitalization, lost wages, homelessness, incarceration, higher medical costs) of prior authorization applied to the population of Ohio residents with schizophrenia and bipolar disorder.  They used conservative estimates of the population at risk and treatment discontinuity as a result of prior authorization programs.  They determined associated indirect costs with these treatment discontinuities and summarized his results in the following table.

The Driscoll and Fleeter study replicates several other studies that illustrate the problems with the "cost savings" of prior authorization.  Those savings to an MCO or PBM are shifted to the patient and the taxpayer.  These studies are consistent with the recent concern about the mass incarceration of the mentally ill.  Nobody is paying attention to the fact that when this happens the cost of care is now paid by the correctional system and not the person's insurance.  If a person with a substance use problem is incarcerated any medication they take to maintain abstinence is generally discontinued resulting in more savings to the MCO.  In addition to the financial analysis, the psychiatric care of these persons is often severely disrupted because correctional systems are now imposing their own form of a limited formulary so that the patient may get a medication, but not one that has been carefully assessed to work.

These studies all demonstrate that "savings" from prior authorization is savings to a health care company and it does not benefit the patient involved.  The costs to the providers in the case of the above table were not even used but per my previous reference are considerable.  I would also add that since this study came out most of the original second generation antipsychotics are now generic drugs and that reduces the Annual Cost Savings considerably.  The estimates for Annual Additional Cost are much higher and don't include the paperwork costs for physicians.  In other words the net added cost of prior authorization for psychiatry is considerable higher in 2014 than it was in 2008.

With all of these considerations it is good to see the state medical society finally paying attention.  That doesn't mean anything will be done and the evidence for that is contained in this quote from Janet Silversmith, Policy Director of the MMA: "We are not trying to eliminate drug prior authorization.  We are just trying to add some sanity to the process.  As it's practiced now we believe drug prior authorization is an onerous, inefficient process that sometimes harms patients."

Why wouldn't any medical society want to kill that kind of process?


George Dawson, MD, DFAPA

Refs:

1:  Howard Bell.  The prior authorization burden.  Minnesota Medicine. November/December 2014:  18-25.  PDF

2:  Soumerai SB, McLaughlin TJ, Ross-Degnan D, Casteris CS, Bollini P. Effects of a limit on Medicaid drug-reimbursement benefits on the use of psychotropic agents and acute mental health services by patients with schizophrenia. N Engl J Med. 1994 Sep 8;331(10):650-5. PubMed PMID: 8052275.

3:  Howard Fleeter, PhD.  Estimate of the Net Cost of A Prior Authorization Requirement for Certain Mental Health Medications.  Prepared by Driscoll and Fleeter for National Alliance on Mental Illness Ohio.  August 2008. (Table used with permission).



Supplementary 1:  The "No - Rx" logo simultaneously symbolizes no prescription for the patient, no acceptance of a prescription from a trained and licensed physician, cost savings for the insurance entity that contracts with the patient to cover their prescription medications, and increased costs for all of the providers, employers, governments and correctional systems that need to address discontinuities in care.

Shut Down The Psychiatric Gulags - Don't Build More!

On my drive home from work yesterday, I heard an outrageous story about a judge ordering LA County jail to build 3,200 psychiatric beds to treat mentally ill inmates in that facility.  As is typical of MPR, I could not find the link today but I did find the link to this LA Weekly story , that basically brings people up to speed.  It is a typical journalistic approach with the human interest component.  In this case the human interest portion was interesting to me, because I have heard these stories hundreds of times from people I have treated who have been incarcerated with a few variations.  The most significant variations have to do with suffering acute alcohol or drug withdrawal and not being assessed or treated for that problem and not having access to maintenance medications that have proven effective for the specific mental illness.  The current plight of the mentally ill in the LA County jail system and increasing judicial pressure on the basis of rights violations for the lack of treatment led county supervisors to vote to build what was called the most expensive building project in county history.  From the article:

"That day, county supervisors ........ voted to spend nearly $2 billion on a long-sought jail to replace notorious Men's Central, a facility that federal investigators say is plagued by suicides, abusive conditions and violence. The funds will build a two-tower compound given the ungainly name "Consolidated Correctional Treatment Facility."

According to the article it will be a 4,860 bed facility,  3,260 (67%) beds of which will be dedicated to treating prisoners with mental illness.  My most recent post on the matter includes information that LA County jail has 19,386 inmates and that recent epidemiological surveys suggest that 30-45% of inmates have problems due to severe mental illness and impaired functional capacity.   That suggests that unless public policy changes, the most expensive building project in LA County could be overwhelmed by demand before it gets started.  The author in this case points out the folly of building this tower.  It is basically the folly of building any large psychiatric facility in the absence of any other infrastructure, but in this case compounded by the fact that this is in fact a jail and not a treatment facility.  There is really no evidence that the problematic aggressive or suicidal behavior will be any better in a new "two-tower compound" with the same jail atmosphere and mentality.

I have previously posted about the plight of the mentally ill being incarcerated in America and the fact that county jails are currently our largest mental institutions.  It is a basic collusion between governments at all levels and the business community to enrich corporations that have been set up to "manage" the American healthcare system.  As usual, the most vulnerable people are "cost shifted" out.  Cost shifting refers to cost center accounting that basically leads divisions within the same organization to try to save money on their budget by shifting the costs to somebody else.  In managed care systems it can lead to all kinds of distortions in care.  It also happens with outside agencies.  I was told about a situation where workers in one county actually dragged an  intoxicated patient over the county line and into another county so that patient would no longer be their  financial responsibility!  Cost shifting is the end result of these perverse incentives.

There is perhaps no better example than incarceration rather than hospitalization.  There are estimates as recent as from a few days ago that treatment and possible hospitalization may cost $20,000/year as opposed to incarceration costing $60,000/year.  In both cases the taxpayers pick up most of the tab.  The cost shifting has occurred from insurance companies and health care systems to the correctional system.  If an insurance company can dump a patient with a severe mental illness into jail, it doesn't cost them a thing.   If that same patient is hospitalized they may receive a one-time DRG (Diagnosis Related Group) payment of about $5,000 irrespective of how long the patient stays.  The hospital incentive is to get them out in 5 days whether they are stable or not to maximize profit.  When they are discharged, the patients are generally expected to go to appointments to discuss their medications.  Clinic profits on these visits are minimal but the main problem is that many of these appointments are missed - in some cases up to 50-60%.  Many of these patients lack stable housing and they frequently end up back in the emergency department and back in the hospital.  Hospitals now have bottlenecks in the emergency department and many people are discharged back to the street.  The cycle of ineffective care continues.

I can attempt a brief analysis of the problem as I watched it unfold during 23 years of inpatient practice.  I will demonstrate how things have changed to the detriment of patients with severe mental illness.  Consider the hypothetical case of Mr. A.  He has diagnoses of depression, schizophrenia and alcohol dependence.   He recently ran out of his usual medications and started drinking.  He became progressively depressed and stopped talking with his family members.  They went over to see him and noticed he has a loaded handgun on his table and was talking about shooting himself.   They called the police who came, confiscated his handgun, noted that he was acutely intoxicated and sent him to the local hospital emergency department.  How has the management of this scenario changed over the past 30 years and why?

In the early 1980s, Mr. A would have been assessed as a person who was high risk for ongoing suicidal behavior (depression, schizophrenia, alcoholism and acute intoxication) and admitted to a psychiatric unit.  The psychiatrist there would have done everything possible to stabilize all three conditions even if it meant civil commitment to a long term care institution.  The length of stay (LOS) would have been on the order of 20-30 days comparable to many current psychiatric LOS in the European Union.

By the late 1980s, a managed care company would have called the hospital or psychiatrist in charge.  They would initially demanded that the patient be discharged to a county detox facility.  They would claim that alcohol withdrawal detoxification was not a psychiatric problem, and therefore the patient does not meet their "medical necessity criteria" for inpatient hospitalization.  If that was ineffective they might say that he was no longer "acutely suicidal" or "imminently dangerous" two additional medical necessity criteria.  In the end they always win, because they just stop paying and the administrators force the clinicians to discharge the patient.  The length of stay is now down to less than 1 week and the patient may not be stable at all at the time of discharge.

By the 1990s, the patient might not even make it to the inpatient unit.  By now psychiatric departments are continuously burned by managed care companies, especially in the case of any patient who is acutely intoxicated at the time of admission.  Many have closed their doors.  Many departments have strongly suggested that the emergency departments send any intoxicated patients directly to county detox units if they are available.  The counties respond by refusing to take any patients on any intoxicants than than alcohol and even then the patient has to blow a number on a breathalyzer consistent with acute alcohol intoxication.   At any point in this process a decision can be made to just send the patient home.  There are various ways the patient can access more firearms at that point or even get the original firearm that was confiscated.  There are also various ways that the patient can end up incarcerated including going back home, drinking and getting arrested for disorderly conduct or public intoxication.  A more complicated situation occurs if the patient is intoxicated and wanders into a neighbor's home or place of business.  I have seen people end up in jail for months on trespassing charges in these situations.   And that brings us in to the 2000s where it is much more likely that a person with severe mental illness will be incarcerated than even make it to the emergency department.  In the 2000s the patient may end up stranded in the emergency department for days or sent home with a bottle of benzodiazepines to handle their own detox if they can deny that the are "suicidal" consistently enough.  There is also the mater of inpatient bed capacity.  Fewer beds are full constantly because bed capacity has been shut down due to managed care rationing and people are often released because there will be no open beds in the foreseeable future.  The LOS in many cases is now zero days, even for people with severe problems.

How did all of this happen?  How did the care of mental illness and addictions fall to such a miserable standard?  It is documented in many posts on this blog.  Professional guidelines were compromised and treatment infrastructure was destroyed by the managed care industry and the politicians who actively supported and continue to support it.  Professional organizations don't stand a chance against pro business state statutes,  commissions stacked with industry insiders, and federal legislation that protects these companies from lawsuits for interference with care.  Even a travesty as basic as prior authorization for generic drugs is unassailable.  I don't understand why these basic facts are so incomprehensible to people in the field.  Just a few hours ago, 1BOM posted a Hall of Shame of entities the original authors claim are failing people with severe mental illness.  This list completely misses the mark and is probably a good example of how deeply entrenched the mechanisms are to prevent treatment  and shift costs away from states and health care companies.

There are countless easy solutions to the problems, but the companies in power literally do not want to spend a dime.  The patient with severe mental illness can receive comprehensive community services and be maintained in their own housing at a cost of $10, 000 to $20, 000/year for clinical services.  That same patient costs corrections departments $60,000 per year.  That patient currently costs managed care companies nothing if they can transfer their care to a local state-funded Assertive Community Treatment (ACT) team.  Managed care companies incur the same cost if the patient is transferred to the correctional system.  If ACOs come to fruition and all of the chronically mentally ill are enrolled, it should be an easy matter to make the managed care companies responsible for both the costs and the patient.  A simple court order to pick up the patient from jail and stabilize them in the community could suffice.

Erecting more gulags won't work.  They are effective only for enriching health care companies that profit by denying care for those with severe mental illnesses and addictions.  They are also another hidden health care tax on the taxpayers who are already paying far too much in hidden health care taxes.




George Dawson, MD, DFAPA

Graphics Credit:  ConceptDraw Pro - this graphic was included as an example with this software.

YOUR PATIENT IS UNABLE TO START YOUR PRESCRIPTION

Just when I thought that prior authorization could not get any worse, I see a fax with that headline.  I guess the business geniuses who thought it was a good idea to send me that fax never stopped to consider what was wrong with that idea.  What could that possibly be?  Let me see, I have made several comprehensive assessments of a medical and psychiatric disorder that is extremely complicated, selected a medication that was seen as appropriate by medical consultants treating another major medical problem,  did all of the medical screening for this particular medication including a meticulous search for drug interactions across 3 different data bases, thoroughly assessed the patient for side effects and complications from this particular medication and stabilized the patient on that medication.  I also had a detailed informed consent discussion with the patient for this medication and not a general class of medications.

Remind me why my patient is unable to start the medication - - - Oh that's right:

YOUR PATIENT IS UNABLE TO START YOUR PRESCRIPTION BECAUSE WE WANT YOU TO PRESCRIBE THE CHEAPEST DRUG OR THE DRUG THAT WILL GET US THE BIGGEST KICKBACK FROM THE PHARMACY AND THAT IS WHY WE ARE IGNORING THE FACT THAT YOU HAVE PRESCRIBED A GENERIC DRUG AND WE THINK THAT ALL DRUGS IN ANY GENERAL CLASS OF MEDICATIONS CAN BE SUBSTITUTED FOR ONE ANOTHER AND OF COURSE WE DON'T REALLY CARE ABOUT THE TIME AND EFFORT EXPENDED IN THE EVALUATION AND TREATMENT OF THIS PATIENT AND THE FACT THAT IT WAS SPECIFIC TO THE DRUG YOU PRESCRIBED AND WE DON'T REALLY CARE ABOUT WHAT HAPPENS TO THIS PATIENT BECAUSE WE ARE IN THE BUSINESS OF MAKING MONEY AND WE HAVE NO PERSONAL RESPONSIBILITY TO THIS PERSON AND YES YOU WORK FOR US AND YOU WORK FOR FREE IN ORDER FOR US TO BE ABLE TO DO THIS.

That simple 8 word phrase says everything about how medical care in this country has been corrupted for the enrichment of companies that make money by denying or interfering with care that has been carefully prescribed for patients by the doctors who know them the best.

A serious rewrite is needed for their fax cover sheet.

George Dawson, MD, DFAPA

Why the Practice of Pharmacy Management is Another Business Hoax

I had the pleasure of dealing with another Pharmacy Benefits Manager (PBM) recently.

It all starts with a fax from a pharmacy anywhere in the United States.  The usual pharmacy fax that looks like a telegram.  I know that because I can recall seeing railroad telegraphers in action in the 1950s and know what telegrams look like.  Pharmacy faxes have that appearance.  A partial Rx was listed on the front basically the drug and number of tablets with no instructions.  The "date of request" was actually 5 days earlier than the date I got the fax.  I pulled up the record and called the 800 number and listen to the usual disclaimers about why I might be recorded.  I don't hear the real reason.

The conversation went something like this:

PBM1:  "Can I verify the patient's identification number?"
Me:  I gave the 10 digit number
PBM1:  "Was that _ _ _ _ _ _ _ _ _ _?"
Me:  "Yes"
PBM1:  "Can I verify the patient's name and date of birth?"
Me:  I recite that information.
PBM1:  "Can I verify your name?"
Me:  I say my name.
PBM1:  "Can I verify your title?"
Me:  "Staff psychiatrist."
PBM1:  "Can I verify your secure fax number?"
Me:  I look it up and say it.
PBM1:  "Can I verify your office number?"
Me:  I state my phone number.
PBM1:  "Can I verify the medication?"
Me:  I state the name of the generic medication.
PBM1:  "Well I am going to have to transfer you to a pharmaceutical benefits manager.  I also need to tell you that person will need to do the same verifications that I just did.  Is there anything else I can help you with this morning?"
Me: (suppressing the remark that they really have not done anything for me so far except waste my time) "No I guess not."

At that point I am connected to a different line and listen to the same disclaimers about being recorded.  I am eventually connected to the second staff person who goes through the first nine steps of the verification process again and then gets into a whole new area:

PBM2:  "Can this person not take the full dose of the medication?"
Me:  "What do you mean?"
PBM2:  "The medication in this case seems like a lower dose.  Can they not tolerate the full dose?"
Me:  "Let me say that I am reading this out of the record and I assume it is the same record you have, because I am looking at an exact copy of the prescription.  I am covering for another physician and his prescription clearly states that the patient is to get two weeks of the medication and take three tablets a day."
PBM2:  "OK I have to fax this information to the pharmacist.  The turn around time is 48 to 72 hours unless I mark it as an expedited review.  Then you can get it back in 24 hours.  Do you want me to mark it as expedited?"
Me:  "I don't know what difference it will make.  Today is Friday and there is nobody in this clinic on the weekend.  The prescription is already delayed by 5 days.  I don't know what difference an expedited review is going to make."
PBM2:  "All right I will send it to the pharmacist.  Is there anything else I can help you with today?"

More wasted time.  The entire length of time it took to listen to the recordings, recite data that the PBM already had to two different people and not get an answer on the "Prior Authorization" was 20 minutes.  Not only that but this company continues to use me as their surrogate in that they are not contacting the pharmacy but sending me another fax to deal with in the next 24-72 hours.

This is a simple vignette that illustrates the malignant effects of business and Wall Street on the practice of medicine in the United States today.  I don't want to leave out the effect of every state and federal politician since Bill and Hillary Clinton suggested that giving businesses unprecedented leverage over physicians would be a good idea.  If you read the vignette you have seen how a business can waste at least 20 minutes of a physician's time,  prevent a patient from getting a timely prescription refill, and in the end leave the physician responsible for what is a business decision made to make more money for a company that has no direct responsibility to the patient.  And all of these manipulations are for a generic low cost medication.  A reader might not realize that physicians often see 10-20 people per day and in many practices have only 15-20 minutes to see each patient.  That means that they could easily spend as much time getting a single prescription approved as they did assessing the patient.  The additional business genius here (how many MBAs did it take to think this up?) is that by sending the final fax back to the physician rather than the pharmacist, it leaves the physician on the hook for being blamed for the prescription not being refilled.  How many times have you heard from a pharmacist: "Your doctor's office did not call us back yet?".  In how many cases was it due to delay that I just described?  To recap, it takes the PBM anywhere from 5-8 days to handle a decision about a medication that I turned out in 20 minutes.  But wait a minute, it takes the PBM 5 - 8 days plus 20 minutes because this decision was already made a week ago by a physician.

Hoax is not a strong enough word.

George Dawson, MD, DFAPA


Supplementary 1:  I could not fit this in to the above post but I also thought about how medical businesses are caught up in customer satisfaction surveys to show how great they are.  In that case they are banking on the fact that they can use physician qualities or psychological tricks rather than real measures of medical quality to get "performance scores" that they can use for marketing purposes.  I would suggest that anyone who is handed a customer survey by a health plan clinic or hospital remember their pharmacy experience when they complete that form.  Let them know that you are very dissatisfied that your prescription was delayed or changed just so one of their contractors could make a few bucks.

Supplementary 2:  I have several posts on this blog about PBM and managed care delaying techniques.  I came across and excellent post by a financial blogger on how her interaction with the same insurer has changed over time.  I would really like to see more people come out with their experiences and go public.  Feel free to post it here, but don't name the actual company.  Post only your experience.  I know for a fact that PBMs monitor this blog, because I got called by one of their VPs within 12 hours of naming the company.  I will only be able to do that  when I am no longer employed.

Supplementary 3:  Just a reminder that this is not my first prior authorization post and it probably won't be the last:

Prior Authorization - A Legal Document?

25 minutes is 25 minutes - The Prior Authorization Rip Off Continues

Prior Authorizations - An Incredible Waste of Time

25 minutes is 25 minutes - The Prior Authorization Rip Off Continues

I can still recall when I was referred to my first web site for a prior authorization of a prescription medication.  My first thought was: "Great - I am going to have to open up an account somewhere so that I can work as an uncompensated employee of a PBM."  It wasn't quite that bad but it wasn't good either.  Online prior authorization request are often hyped as the solution to the ongoing physician harassment by PBMs.  They claim to be faster that the usual fax or telephone methods.  From the scenario I recently posted it is hard to believe that they could be any slower.

In this case I had to be the data entry person and enter data from a fax from the pharmacy and the demographic section of my EHR onto two computer screens.  After establishing that all of the correct releases were in place, that involves going between these screens and supplying data that physicians typically don't ever use and therefore do not care about.  In this case it was health insurance data - the group number and name of the policy.  Remind me why I went to medical school again.  Luckily I work with an excellent staff, but it meant getting up and finding the right person to get me this information.  I can imagine that there are a number of settings where it might not be listed.  In that case you cannot complete the form.  It just locks up there in cyberspace and does not allow you to complete and submit it.  The form is actually a request for prior authorization and you have to do it even if the patient has been taking the medication for some time.

In the previous post I pointed out that some members of my state psychiatric society had developed a form that included data on previous medications from the class in question that were either not tolerated or failed.  Of all of the people I have seen, there are very few people who can provide that level of detail over any 10-20 year span of medication trials for disorders than can affect memory and motivation.  I usually provide a checklist to prompt people as shown below.  In many cases there are surprisingly few responses until I show them the checklist.  Medication names are basically medical jargon at its best, and people outside of any field who are unfamiliar with the jargon are less likely to recall these terms.  Filling in the past medications for a prior authorization is problematic for that reason.  Filling it in is also problematic if the patient has been seen for years.  Somebody still needs to go in and search for the medications.  Most EHRs have poor search capability for classes of medications and even if there is one table somewhere it will not say whether the medication failed or was not tolerated.  Without that information the form cannot be completed.

With the wonders of the Internet and computers, prior authorization remains a waste of time.  The forms are not designed for physicians to complete and the human factors involved still require a lot of time.  No physician I know has 20 - 25 minutes to waste on form completion for every moderately priced prescription that they write.  No physician I know has that kind of time to waste irrespective of the cost of the drug.  The phenomenon has been studied to some degree (1) and the actual costs are very high.  One study showed that physicians spend at least 35 minutes a day on this activity and required 0.67 FTE non-clinical staff  per FTE physician.  The total annual cost of the physician and non-clinical staff time was $85,276.  That is nearly 4 times as much as Canadian physicians (2) and I am guessing that most of that is due to prior authorization.  That translates to an annual figure of $23 to $31 billion dollars annually (3) to medical practices in the US.  When I say that I have done a lot of free work for managed care companies and PBMs I am not kidding.

There has been some additional data available about prescription drugs used for psychiatric indications in a report from SAMHSA (4).

I think that it is apparent from the graph that the growth in medication spending is more likely to be due to patent protection of name brand medications than excessive prescribing of expensive drugs and the pricing structure of specific pharmaceutical companies.  For a graphic showing some of these patent expirations check out this link.  I can recall the clozapine prior authorization procedure in this state when it first became available in the 1990s.  Clozapine prescribing was limited to registered psychiatrists and for every prescription you had to call a PharmD in the Department of Human Services and recite the diagnosis and white blood cell parameters.  It did not take long to realize that the expense of the drug and the associated monitoring was not a determining factor in the prescription of this medication.  The argument has been made by some that clozapine was not used when it might have been useful because of the barriers to prescribing it.  Those barriers have been widely recognized by psychiatrists and the prior authorization was not a determining factor.  It was discontinued in about 2 years and most of the companies who currently handle it have an expedited enrollment in their registry that is faster than most medication prior authorizations.

If PBMs want to reject pharmacy claims they can do it easily on business grounds rather than involving physicians.  They can also just charge a high copay.  This is clearly a high cost problem to physicians, clinics and hospitals.  Eliminating it would result in more saving than the mythical electronic health record dividend.

George Dawson, MD, DFAPA

1: Sakowski JA, Kahn JG, Kronick RG, Newman JM, Luft HS. Peering into the black box: billing and insurance activities in a medical group. Health Aff (Millwood). 2009 Jul-Aug;28(4):w544-54. doi: 10.1377/hlthaff.28.4.w544. Epub 2009 May 14. PubMed PMID: 19443478.

2: Morra D, Nicholson S, Levinson W, Gans DN, Hammons T, Casalino LP. US physician practices versus Canadians: spending nearly four times as much money interacting with payers. Health Aff (Millwood). 2011 Aug;30(8):1443-50. doi: 10.1377/hlthaff.2010.0893. Epub 2011 Aug 3. PubMed PMID: 21813866.

3: Casalino LP, Nicholson S, Gans DN, Hammons T, Morra D, Karrison T, Levinson W. What does it cost physician practices to interact with health insurance plans? Health Aff (Millwood). 2009 Jul-Aug;28(4):w533-43. doi: 10.1377/hlthaff.28.4.w533. Epub 2009 May 14. PubMed PMID: 19443477.

4: Substance Abuse and Mental Health Services Administration. National Expenditures for Mental Health Services and Substance Abuse Treatment, 1986–2009. HHS Publication No. SMA-13-4740. Rockville, MD: Substance Abuse and Mental Health Services Administration, 2013.

Supplementary 1: I received a prior authorization fax today about two weeks after the original post.  It contained a number of checkboxes that were very crude approximations of the decision making process for prescribing the drug.  Since the strategy itself serves no useful purpose, I continue to conclude that this is a process designed to slow down and possible thwart the prescription process for an FDA approved drug, simply because of high cost.  Any delay involved makes it less likely that the patient will pick up the prescription and increases the likelihood that the fax will get lost in the process.  

Prior Authorizations - An Incredible Waste of Time

Anyone who has read this blog in the past is aware of my opinion of middlemen in health care and how they waste everyone's time and run up costs.  Pharmacy Benefit Managers (PBM) remain there right up at the top.  The PBM is the company that your doctor calls to get authorization so that an insurance plan will pay for all or part of a specific prescription drug.  It has never been more clear to me that their sole function is to be an obstacle to the physician, the pharmacist and the patient.  The goal of that obstruction is to increase the likelihood that anyone of those parties will give up at some point and either not fill the prescriptions or accept a different product that is less expensive, less effective, or one that has more side effects.  I am sure that the pharmaceutical companies have gamed the system to make it harder for PBMs to deny claims on a scientific basis.  They can do this by maximizing the number of FDA approved indications up front.  In many cases that results in a product with multiple diverse indications so that the newer medication can be prescribed based on secondary indications.  The physician, pharmacist and patient are left to deal with all of the unnecessary bureaucracy in between.

I posted my interaction with a PBM sometime ago and named them in that post.  I learned about the power of corporate America as a result of that post.  The VP of the company involved called me the next morning and wanted information about the patient involved.  One thing led to another but the bottom line was that I pulled that post as a result of that sequence of events.  Since my position has not significantly changed since then, the companies involved here will remain nameless.  Keep in mind that identical transactions occur tens of thousands of times per day in the United States as PBMs and pharmaceutical companies battle for the healthcare dollar at your expense.

I am still working on the theory about how the VP of a PBM hears about a post on an obscure Internet blog and calls me the next day.  The only three theories I have at this point are:

1.  NSA grade Internet surveillance system by the managed care cartel.

2.  A reader wants to see me silenced because they disagree with my viewpoint or just dislike psychiatrists.  They forwarded the link to the company named in my original post.

3.  My reputation as a tireless crusader against managed care and all of its associated systems.  Well not so much a crusader, but there have been some memorable moments.  Like a conference where I was speaking out against managed care - rather vehemently only to have the VP of one of these organizations remark:  "Dr. Dawson - don't you work for a managed care organization?"

If I did - they never censored me.

Back to the case at hand.  I was called originally by a pharmacist and had no information about the situation.  I had to call her back and ask for a fax.  I got the fax and it contained the prescription and a number for the PBM.  I called and got their endless and indecipherable telephone queue.  After typing in the correct identification number 3 times and saying it once (I thought I would forgo the voice recognition system that is set up to not work) I was put on hold and connected with a human.  He asked me to "verify" in a line by line manner all of the data already on the faxed form.  After wasting those minutes he talked about pulling up the prior authorization points as though he was going to call in another person for that detailed process.  After  a long pause (I am sure that many of my colleagues lose it at this point) he asked me the indication for the drug.  This drug has only one indication and I told him.  He said:  "It's approved."

That sequence of events, taking a total of about 20 minutes would be enough to piss off any intelligent person, but then he said:  "The office can call the pharmacy and tell them the prescription is authorized"  I was momentarily confused and said "What office?"  He said: "Your office."

That's right.  Here we have a sequence of events that starts at the pharmacy with the PBM telling the pharmacist that prior authorization is needed.  The pharmacist has to talk to me twice on the phone and send me a fax.  And I have to complete this waste of time by calling and acting like an agent of the PBM.  Just to be sure that I wasn't being totally lied to I asked the pharmacist if it was true that the physician's office had to call and complete this sequence from hell.     Her response was "It's about 80:20 from the doctors' offices."

Call me a dinosaur.  Call me a hot head.  But this exercise in helping corporate America make more money, while taking valuable time away from me, my employer, my patients, and my family is an abomination and a manipulation.  It can exist only in a country where corporate welfare is the rule of the day and conflict of interest is at all levels of government.  From the perspective of corporate America prior authorization is a good way to get physicians and pharmacists to work for them for free.  From the physician's perspective - it is a complete waste of time.


George Dawson, MD, DFAPA

Supplementary 1:  Although the sequence of events listed above may sound incredible it is not.  I have dealt with PBM telephone queues where there was no way out.  You could not enter the numbers by keypad or say them through voice recognition.  There was no way to speak to a human.  I had to call the pharmacist back and explain that the prior authorization through the PBM was basically a sham and if the patient wanted the medication they would need to pay for it out of pocket.

It would be a lot more honest if the PBM would just tell people: "We make money by denying your prescriptions and in an ideal world we would prefer to not have to pay for anything."

But I guess that would be bad for public relations.

Who Runs My Drug Plan?

The real issue in pharmaceuticals used to treat mental illness is the business practices that looms as an obstacle between the psychiatrist prescribing the medication and the patient who wants to receive the medication.  I have posted about the managed care practices - specifically pharmacy benefit managers (PBMs) that get in between physicians and patients. That previous post shows a diagram from an internal memo that reveals some perspective on the PBM attitude.  The goal for them is to come up with a business argument that will either improve profits for the managed care company or justify the billions of dollars in costs that PBMs add to the health care system every year.

The National Community Pharmacists Association fights back against PBMs from this web site.  A lot of what you find is relevant for pharmacists also applies to physicians - especially wasting physician time, indirectly affecting reimbursement, and disrupting the patient-physician relationship by dictating medications that need to be prescribed that are financially advantageous to the PBM.

Some of the details provided on this site are very interesting.  One example is a $10 price spread on up to 4 billion prescriptions per year.  I once read that PBMs made up an $80 billion per year industry and it is easy to see how they can get there.  In fact, the volume strategies that they use are very similar to the financial services industry.  In both cases, political advantage has added businesses that levy another tax on consumers and do not provide any added efficiency.  It is easy to see how managed care strategies fail to contain health care inflation when the intermediaries with government advantages are set up to maximize profits and waste the time of physicians and pharmacists.  

If you are a physician, watch the "Fed Up With Phil" video and ask yourself if it isn't time to get rid of health care middlemen that are increasing costs and in many cases detracting from the quality of health care?  If you are a physician, isn't it time that you or your professional organization starting putting up web sites like this one to educate the public about managed care and all of its problems?  Isn't it time that we stopped wasting our time and money with politicians?

George Dawson, MD, DFAPA

Managed Care 101 – The Prior Authorization Hoax

As managed care organizations worked on how they could prioritize pricing over medical decisions they came up with various plans to “manage” how physicians prescribed medications.  I was a member of two Pharmacy and Therapeutics Committees (P & T) that  both had this as a goal.  One of those committees had a much stricter mandate in terms of saving money.  The basic strategy used by that committee was to place a drug “on formulary” or “off formulary”.  If it was “off formulary” it was not available to any doctors within the HMO to prescribe.

The idea that all drugs within a class that had the same purported mechanism of action ruled the day.  As an example, all of the selective serotonin reuptake inhibitors (fluoxetine, paroxetine, sertraline, citalopram, escitalopram, fluvoxamine) would be considered equivalent medications and the committee would decide to place the least expensive ones on the formulary.  At the time, the major controversy was fluoxetine because there was no generic brand available and the company that produced it was notorious for not negotiating prices with hospitals and health care systems.  There was an eventual appeal by psychiatrists who presented to the committee on the unique qualities of fluoxetine.  At the time it was the only medication studied in adolescent depression for example.  Eventually a rule was passed that it was nonformulary for any physician who was not a psychiatrist.

The total cost of the drug was more of a consideration than the absolute price.  Very expensive drugs were approved that had questionable endpoints based on the fact that utilization would be low and that advocates for a particular untreatable illness would want it.  So the decision of the committee and their mandate was to reduce the use of relatively more expensive drugs that would be used fairly frequently.  In some cases, the off formulary drugs were available by “prior authorization” meaning that the prescribing physician needed to usually write up an appeal and fax it to the pharmacy or health plan and in some cases make additional calls.

The health care business has a long history of introducing layers and layers of management driven largely by the amount of money involved.  If you can successfully insert more management for even a small percentage of the available health care dollars you will potentially have a multi billion dollar business.   The management of pharmaceuticals is no exception and the Pharmacy Benefit Manager or PBM was born.  The task of the PBM like the task of a P & T Committee is to control the prescribing physician and force them to choose a medication based on the lowest cost.  Individual variation between patients and all of the other variables that physicians have to take into account do not matter.  If the physician or the patient thinks that they do – it will take a prior authorization for the alternate medication.  

The PBM model was designed from the outset to take a central role in the management of prescription drugs by replacing the relationship that the patient has with their health plan, their pharmacist, and even their physician.  How do I know this?  Take a look at their game plan from an internal memo in the diagram below.  This diagram was taken from an internal memo from over 15 years ago.  The structure depicted in the diagram is the system of care that exists today and the one that 95% of patient have their benefits managed through 

The prior authorization fallacy is essentially the same as the utilization review fallacy.  The most charitable interpretation is that it assumes that a person who is not necessarily a physician and who has no personal responsibility for your care can substitute their judgment based on a cost consideration.    

The diagram is also instructive in the way that the prescribing decision (and the dispensing decision) is trivialized as a "habit" rather than a decision that takes into account the evaluation and personal knowledge of the individual patient.

Today all physicians are routinely subjected to prior authorization procedures that waste significant amounts of their time and the time of their staff in order to make seem like the PBM decision has some degree of medical legitimacy.  The cost to medical practices is huge and completely unnecessary.  If PBMs are really businesses there is really no legitimate reason that they need to include physicians in their decisions of what medication should be covered.  They just need to plainly state that to their patients and deal with the public relations problems instead of wasting about one million hours of physician time per week.  In the weeks that follow I will demonstrate just how far this business plan has infiltrated medicine and psychiatry and what the response has been to date.

George Dawson, MD