In the ever-evolving landscape of healthcare, the shift from fee-for-service to value-based care is a pivotal transformation that has the industry buzzing. This change prioritizes patient outcomes over volume, aiming to ensure high-quality healthcare at a reduced cost. However, this paradigm shift doesn’t come without its set of challenges, particularly concerning cost management. Prior authorization software automates a notoriously time-consuming process, helping you reduce operational costs while connecting patients to the care they need.  

Value-based care: A multi-pronged challenge

Under the value-based care model, healthcare providers payments are tied to patient health outcomes. The focus shifts from the quantity of services delivered to the quality and efficacy of those services. 

Shifting from a fee-for-service to a value-based care model presents multiple challenges for healthcare providers and systems. 

• One primary obstacle is the difficulty in aligning financial incentives among all stakeholders, including physicians, hospitals, and insurance providers, to focus on patient outcomes rather than the volume of services delivered. 
• Another challenge is the lack of robust data analytics and interoperability to track, measure, and reward value effectively. 
• Importantly, lack of patient engagement also poses a significant hurdle; patients who are not actively involved in their healthcare may not follow treatment plans or make necessary lifestyle changes, which are crucial for the success of value-based care models. 

Overcoming these challenges requires coordinated effort across the healthcare ecosystem. The good news:  Technology can aid with administrative tasks like prior authorization, facilitate better interoperability, and even support improved patient engagement. 

The prior authorization cost-saving myth

Before diving into the software side of things, let’s understand what prior authorization is—a requirement that providers obtain payer approval to prescribe a specific medication, procedure, or service. The intent centers on ensuring prescribed care is medically necessary, meets individual payer’s guidelines and is cost-effective. Unfortunately, with no standardization across payers, the reality is a complicated web of evolving requirements that more often than not lead to care delays and claim denial. Moreover, frustrated patients may abandon treatment. A 2022 AMA physician survey highlights the pitfalls of prior auth delays or denials, noting:  

• 25% of providers said  it led to a patient’s hospitalization  
• 19% said it resulted in a life-threatening event or one that required intervention to prevent permanent impairment or damage 
• 9% said it contributed to a patient’s disability or permanent bodily damage, congenital anomaly or birth defect, or death—9%.

Poorer health outcomes, of course, come at a price. The AMA notes that “86% of physicians reported that prior authorization requirements led to greater use of health care resources, resulting in unnecessary waste instead of cost savings.” From ineffective step therapies to emergency care visits, burdensome prior authorization policies add to healthcare costs by forcing patients through a maze of ‘less costly’ options. 

Talk about counterproductive in a value-based care model!

Such policies delay timely access to the most appropriate treatments, leading to worse health outcomes and potentially more expensive interventions in the long run. These delays and added complexities not only escalate healthcare costs but also decrease patient satisfaction and engagement, which is essential for the success of value-based care. In essence, cumbersome prior authorization processes undermine the very objectives of value-based care by focusing on short-term cost savings at the expense of long-term value and patient well-being.

How prior authorization software drives value  

Streamlined Workflow

By automating prior authorizations, the software makes it easier for providers to submit, track, and manage requests. Automation reduces manual effort 70% or more, which in turn frees up time for patient care. 

Error Reduction

Prior authorization software significantly reduces errors and preventable denials, reducing claims rework by 90%.

Cost Savings

Automation leads to time savings, and time savings translate to cost savings.  Not to mention that your staff can spend more time on high-value, patient-centric work, which leads to higher job satisfaction. 

Compliance Made Easy

Regulatory compliance is a big concern in healthcare. Prior authorization software adheres to updated standards, making compliance effortless for providers.

Smooth your value-based care transition with automated prior authorization

As value-based care becomes more prevalent, every dollar AND every minute counts. Adopting prior authorization software can help providers deliver quality healthcare experiences that keep patients on track without compromising on operational efficiency. 

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