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Myndshft Blog

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June 12, 2023

Automated Prior Authorization: Its Role and Impact on Socioeconomic and Racial Disparities in Healthcare

by Susan Lawson-Dawson | Healthcare Technology, Prior Authorization

While there has been significant attention given to eliminating systemic biases and addressing social determinants of health in the national conversation, the ability to access healthcare can also be hindered by the utilization management (UM) processes. In particular, prior authorization, which necessitates approval from a payer before a member can receive medical treatment.

Although it may seem logical to assume that this barrier affects all members equally, regardless of their race or socioeconomic status, the reality is that prior authorization disproportionately impacts predominantly impoverished, rural and minority communities. Automated prior authorization can help overcome disparities.  

Problem: Providers in underserved communities need more bandwidth

The 2020 pandemic and a snail’s pace recovery from it has impacted all providers. Hospitals in underserved communities have felt the financial fallout most profoundly. Those providers often operate under tight financial constraints and have a limited number of clinicians and ancillary staff members to keep up with patient volume, let alone dedicate time to the laborious manual process of obtaining prior authorizations.

Time is already a rare commodity in small rural hospitals because they may stand alone as the sole provider of healthcare services. They offer the emergency services you’d expect, but may also be the only source for lab testing, maternity care, rehabilitation and more. And the added pressures can leave hospitals in the red. 

The Center for Healthcare Quality and Payment Reform notes, “More than 100 rural hospitals have closed over the past decade, and more than 600 additional rural hospitals—nearly 30% of all rural hospitals in the country—are at risk of closing in the near future.” 

What’s more, a USDA Economic Research Service study of poverty found that 10% of all US counties have “high and persistent poverty” levels, 86% of which are in rural areas. Especially vulnerable among rural communities are residents who identify as Black or African American and American Indian or Alaska Native. This is because nearly half of the rural population in these groups live in those “high and persistent poverty” counties, compared to 20% of rural poor Hispanics and 12% of rural non-Hispanic Whites. 

How prior authorization software helps

Rural healthcare providers, whether hospitals or primary care, can benefit from prior authorization software. By automating a tedious, manual process like prior authorizations, clinicians and office staff alike save time that can be better spent on direct patient interactions. The typical, end-to-end process takes on average 48 minutes—and that’s if you aren’t stuck waiting on hold during phone calls with payers. 

With prior authorization software like Myndshft, you get an immediate productivity boost. Benefits verification and eligibility, patient financial responsibility calculation and prior authorization requirements determination are run simultaneously, taking less than a minute. Prior authorization submission takes place more efficiently too, typically 5 minutes or less. That equates to hours saved every day, freeing clinicians and staff for higher-value tasks. 

Problem: High levels of care avoidance due to cost based on race, ethnicity or socioeconomic status

Socioeconomic factors also play a crucial role in prior authorization barriers. Individuals from lower socioeconomic backgrounds often face significant challenges in navigating the healthcare system. Limited access to healthcare resources, including primary care physicians and specialists, can lead to delayed diagnoses and increased severity of conditions. When these individuals finally gain access to specialized care, they may encounter prior authorization barriers that further impede their ability to receive necessary treatments.

Insurance coverage disparities also contribute to socioeconomic disparities in prior authorization. Individuals with lower incomes are more likely to have insurance plans with higher deductibles, co-pays, or restrictive formularies. These financial constraints can make it harder for individuals to afford medications and treatments that require prior authorization. Analysis by the Health Equity Tracker shows that care avoidance due to cost is highest among minority populations.  

Bar chart of care avoidance by race

A survey conducted by the Association of Black Cardiologists (ABC) and the American College of Cardiology (ACC) in 2018 asked physicians about barriers encountered in prescribing the newest evidence-based therapy for cardiovascular care. The survey found that:

  • 79% said it led to care delays
  • 74% said it reduced medication adherence and increased medication discontinuation
  • 76% reported higher patient confusion
  • 60% said it contributes to worse outcomes

Perhaps more importantly, a number of respondents point to the onerous prior authorization process as a cause for patients to lose faith in the healthcare system and in recommended therapies. After all, if prior authorization is denied and the patient must go to a second-choice therapy, it doesn’t feel like optimal care, right?  In fact, one survey participant said that prior authorization “… reinforces stigma for access to care issues for minorities.” 

How prior authorization software helps

Prior authorization software reduces preventable denials because it pre-checks submissions for inaccurate or missing information. In addition, because the prior authorization submission includes only the necessary data, payers can adjudicate claims more efficiently, reducing delays that could lead to treatment abandonment. 

From a health equity perspective, achieving comparable health care and health outcomes remains impossible as long as barriers to access exist for these groups of patients. Prior authorization software represents one way to tackle multiple contributors to healthcare inequities and address the ongoing challenges of overworked clinicians and staff that care for marginalized communities. 

Prior authorization software helps level the playing field. Connect with Myndshft to learn more