Big health insurer gives physicians final say in treatment.
The United Health Group, the second biggest managed care company in the United States, has told physicians that they will no longer require prior approval before carrying out most medical and surgical procedures. It is closing its utilization review division, which runs its prior authorization procedures. 
 
The group—which insures 14.5 million people, including 8.7 million in managed care units—found that requests for approval of care were almost always granted; it had been denying coverage in fewer than 1% of all precertification decisions. 
 
The company said that it was taking the final say out of the hands of the managed care bureaucracy and returning it to the treating physician, because requiring doctors to get prior authorization was costing more money than it saved. The division cost $128m to run last year. 
 
The group's decision was possible, in part, because the company is one of the few large health care plans that has succeeded in using computers to track the behavior of its 42,000 doctors in 17 states and compare costs and patient outcomes. These include such indicators as whether doctors prescribed beta blockers after heart attacks and ordered mammograms to women aged over 50. “That quality measurement program is the reason we felt comfortable doing this,” said Lee Newcomer, the group's medical director. 
 
Thomas Reardon, president of the American Medical Association, said: “This action is historic and represents a long overdue victory for America's patients and the care they receive.” 
 
Susan Pisano, spokeswoman for the American Association of Health Care Plans, said the utilization review still had a role in holding down unnecessary procedures. “It has the effect of saving money, but the primary consideration is to reduce the dangerous level of variation we see in a lot of procedures.” 
 
She cited evidence that operations such as hysterectomies were much more likely to occur in some geographic regions than others. Some health care analysts said that, overwhelmed by consumer and regulatory backlash (and faced with a presidential campaign in which managed care is a leading issue), the industry was beginning to change.