Government

No questions asked

The original Medicare law did not permit pre-authorization for health care services and today traditional Medicare does not require pre-authorization, instead relying on the doctor to certify medical necessity for care.

However, in recent years CMS has used demonstration projects to require pre-authorization for durable medical equipment, certain wheel chairs and non-emergency ambulance transportation… because these areas are subject to abuse … remember those scooter ads?

In other words, Medicare does very little to manage costs through prospective utilization review which also means it can do virtually nothing to monitor fraud and abuse except via retrospective audits.

Medicare Advantage plans routinely require pre-authorization to control costs and patients and doctors hate it. Many health plans other than Medicare also require some form of pre-authorization, all intended to reduce unnecessary spending on health care. Unfortunately, patients and doctors view such reviews only as attempts to not pay for legitimate health care and as interference between patient and doctor.

Nobody seems concerned over the documented substantial unnecessary health care spending each year.

So, the question is, how will costs be managed under a universal health care system that requires no out-of-pocket costs for any health care service and thus provides an incentive for more care to be provided?

The answer may be found in other systems in which controls are set on certain services based on cost-benefit criteria that consider the patients overall health status and in some cases age. Should a knee be replaced for a grossly obese patient? Should a heavy smoker receive certain surgery? Should a 95 year old be eligible for major heart surgery? Cost may also be managed indirectly by limiting resources.

Yes, this is speculation, but based on research into other systems. Nevertheless, the question is still valid. How will a universal system, especially one with limited or no cost-sharing, manage costs year after year? Inquiring minds want to know.

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