Optimization Reviews, sometimes referred to as “prior authorizations” are a tool used by Medicare, businesses, and private insurers to improve healthcare quality, safety, and affordability.
They are essentially a review of certain prescribed medications or procedures to ensure they don’t put the patient at risk for adverse reactions, costly duplications, or dangerous overlaps.
Prescribers and hospital systems often complain that the reviews are burdensome and add to administrative costs.
However, a study from the independent American Enterprise Institute, found that the savings generated from optimization reviews far outweigh any additional administrative costs.
“Savings,” the authors write, “vastly exceed the overhead costs of administering it, by about a factor of 10.”
That means patients and consumers save 10 times more from optimization reviews as it costs a hospital to administer them.
The reviews also reduced drug spending among Medicare Part D beneficiaries by close to $100 a year per person. Considering there are nearly 52 million Americans enrolled in Part D, those savings are substantial.
Cost savings are just one benefit of optimization reviews. Improved patient safety is another.
Despite these benefits, optimization reviews have become a legislative target.
A bill was introduced in 2023 that would have effectively eliminated a health plan’s ability to utilize them.
Thankfully, while the legislation passed the House, it died in the Senate and did not become law. Any attempts to push similar legislation should be rejected accordingly.
The evidence is clear that optimization reviews save money and improve safety.
