New Managed Care Findings from Yale University Described (Pharmaceutical Demand Response To Utilization Management): Managed Care

2024 FEB 19 (NewsRx) -- By a News Reporter-Staff News Editor at Health Policy and Law Daily -- Fresh data on Managed Care are presented in a new report. According to news originating from New Haven, Connecticut, by NewsRx editors, the research stated, “Prescription drug insurance increasingly imposes prior authorization (requiring providers to request coverage before claim approval) to manage utilization. Prior authorization has been criticized because of its administrative burden on providers.”

Funders for this research include Yale University, United States, Cowles Foundation, National Bureau of Economic Research, United States.

Our news journalists obtained a quote from the research from Yale University, “The primary alternative to man-aging utilization is imposing out-of-pocket (OOP) payment to incentivize beneficiaries to seek lower-cost care, effectively providing beneficiaries with partial insurance. Would beneficiaries prefer indirectly paying for prior authorization through higher premiums; or would they prefer prior authorization was replaced by higher OOP costs? This tradeoff depends on how much OOP costs could be displaced by prior authorization, which depends on their relative impact on demand. I estimate the effect of prior authorization and OOP costs on pharmaceutical demand in Medicare Part D, addressing endogeneity caused by unobserved drug quality and selection into plans.”

According to the news editors, the research concluded: “Despite criticism of prior authorization, I find that Medicare beneficiaries would prefer higher premiums to pay for prior authorization, over higher OOP costs.”

This research has been peer-reviewed.

For more information on this research see: Pharmaceutical Demand Response To Utilization Management. Journal of Health Economics, 2024;93. Journal of Health Economics can be contacted at: Elsevier, Radarweg 29, 1043 Nx Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of Health Economics - http://www.journals.elsevier.com/journal-of-health-economics/)

The news correspondents report that additional information may be obtained from Oren Sarig, Yale University, Dept. of Economics, New Haven, CT 06520, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jhealeco.2023.102830. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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