How Insurers Hijacked the Doctor-Patient Relationship
By Wendy Dean, MD and Matthew Ramsey
July 30, 2025
Two decades ago, farming needed a revolution. Agriculture was in a death spiral of soil exhaustion, soaring fertilizer costs, and falling profits despite burgeoning yields. Don Campbell, a rancher in Canada and a leading voice in the resulting regenerative agriculture movement, said, “If you want to make small changes, change the way you do things; if you want to make major changes, change the way you SEE things.” Medicine might take a lesson from Mr. Campbell.
It seems like almost every day there is a new post on TikTok, Instagram, LinkedIn, X, or elsewhere, from a doctor venting their frustration about prior authorization (PA) or imploring an insurer to cover a patient’s urgent course of treatment. The doctors have thoroughly reviewed their patient’s history, examined them, made an assessment and, in collaboration with their patient, made recommendations for next steps, taking risks, benefits, and patient values into account. But increasingly often, a lurking third party will weigh in, one who has never talked with or examined the patient: the patient’s insurer.
Prior authorization is the process your doctor or hospital undertakes to confirm that a drug, device, test, or procedure (deemed necessary by the clinician) is covered and will be paid for by your insurer. Insurers have expanded PA substantially over the past two decades arguing it is essential to capping costs. Physicians now generate, on average, 40 PAs each week, which take 13 hours to complete. The rationale is that doctors, unchecked, would over test and over treat, leading to skyrocketing costs. That claim, though, lacks evidence. In fact, AMA data suggests PA increases costs to both patients and insurers for ineffective therapies, additional office visits, urgent care or emergency room visits, or hospitalizations.
PA also gives the health plan, or its surrogates, a vote about whether they think the recommended care is medically necessary, safe, and cost effective. Ironically, insurers (and doctors’ offices), feeling the burden of PA, increasingly outsource it to third party vendors who profit from the process. Some would argue this treads dangerously close to – if not actually comprising – the corporate practice of medicine (CPOM), a practice curtailed by 33 states. CPOM laws are in place to ensure that medical decisions are not influenced by corporate interests but are made solely in patients’ interests.
Prior authorization has been around since the 1970s, with the advent of HMOs, so why does it seem so frustrating now? Until recently, independent physicians had leverage with insurers. Payors used to track “physician abrasion” – the hassle associated with belonging to an insurance network. Insurers titrated the “abrasion” when physicians, fed up with barriers like PA, left their network, threatening timely access for beneficiaries (network adequacy was tracked until 2018). But now that 7 of 10 physicians are employed, they no longer have leverage; their employers decide whether the hassle is worth remaining in-network (spoiler: it always is). In a 2023 report, prior authorization volume had increased 23% over the prior year.
Absent the option to leave the network, clinicians reduce their abrasion in other ways, which often work to the insurer’s goals, though rarely for the patient’s. They shape recommendations to minimize the need for PA, like starting with the cheapest drugs, avoiding new (and maybe better) therapies, recommending physical therapy instead of surgery. Consequently, too many patients (78%) give up on treatment altogether and those that do start are less likely to follow through with the full course of therapy. And even when physicians learn and follow insurer guidelines for medical necessity, Patients’ definitive care is delayed, their suffering prolonged, their out-of-pocket costs skyrocket, and their risk of going to the emergency room or being admitted to the hospital rises. Even when physicians try to follow an insurer’s guidelines, as soon as too many physicians learn the answers that lead to approvals, insurers “update” their (proprietary and undisclosed) guidelines or shift to artificial intelligence and predictive models.
None of this is cheap. Utilization management of drug benefits alone costs $93.3 billion annually. That breaks down to $6.0 billion for insurers, $24.8 billion for manufacturers’ patient support programs (i.e., financial aid, copay cards or drug donations), $26.7 billion of physician costs to navigate approvals and appeals, and $35.8 billion for patients. The costs of suffering to both clinicians and patients – the frustration, worry, anger, moral injury, and prolonged illness or injury – are incalculable.
PA has created an untenable practice environment and to date, efforts to curb its impact, like the Gold Card Act in Texas, have been underwhelming. Most of the reform efforts focus on doing things differently, tweaking existing workflows through automation, a shift from manual to electronic processes, or imposing arbitrary deadlines on reviews. For example, the CMS-0057 Final Rule, released on January 17, 2024, introduces strict timelines for PA decisions – 72 hours for urgent requests, 7 days for standard ones – and requires digital integration with electronic medical records. New Jersey legislation, passed in 2024, went further, “Insurance carriers will have… 24 hours for ‘urgent’ requests and 72 hours for non-urgent requests.” Other reform recommendations, which might have modest additional impact include limiting medical necessity review, ensuring reviewers are truly “peers” in expertise, and requiring disclosure of clinical guidelines and review criteria for PA requests.
But real reform will only happen when we are willing to…
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