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Statement of The Hon. Nydia M. Velázquez on Utilization Management: Barriers to Care and Burdens on Small Medical Practices

Washington, September 11, 2019

On this committee we are focused on breaking down barriers that many small businesses face. Whether it is ensuring small firms have access to affordable capital or reducing regulatory burdens, our focus on this Committee is to create a thriving Main Street that makes towns and communities across the country better places to live, work, and raise a family.

An essential part of any community are the doctors who are relied upon in every corner of our country to keep us healthy. But what many people forget is that many doctors, especially in rural and underserved communities, are themselves small businesses.

They face the same challenges that any small employer encounters---making payroll, paying rent, managing overhead expenses, while also dealing with the same regulations that larger hospitals can manage through bigger budgets and more resources.

However, when doctors spend hours dealing with paperwork or can’t treat a patient because a health insurance company won’t approve a treatment, the result is patients suffering. And that is why we are here today -- to discuss a barrier preventing family physicians and specialists from providing critical care to their patients.

Prior authorization is a cost savings tool used to reduce health care spending through improper payments and unnecessary care. Before doctors can provide even routine care procedures, diagnostic tests, or prescriptions, they must first obtain approval from a patient’s insurer.

While in some cases this process leads to appropriate treatments, reduces costs by eliminating expensive tests, or unnecessary prescriptions, it’s also putting an undue burden on physicians, their staff, and patients. It is not uncommon that patients now face delays of two weeks and sometimes over a month before getting treatment.

In fact, more than 25 percent of doctors report that prior authorization has led to a serious adverse event for a patient in their care. And, eighty-two percent report the burdens associated with prior authorization lead to delayed care. Meanwhile, doctors are sitting on hold with insurance companies to explain why their patient needs a certain treatment.

Sadly, this is an issue impacting doctors practicing in nearly every area of medicine and every part of the country. It affects each doctor paid by insurance but is especially problematic for small group and solo practitioners that simply don’t have the resources to hire additional administrative staff.

Between the massive student loan debt many doctors face and these administrative burdens, it’s no wonder that many doctors are deterred from pursuing the great American Dream – to own and operate their own business. By 2030, the Association of American Medical Colleges expects the workforce shortage to expand to over 100,000 doctors nationwide.

One way to combat this growing problem is to empower small private practices to fill the gaps. They can do this with commonsense policies that streamline the prior authorization process – making it easier for them to do what they were trained to do – keep our communities healthy.

I support reducing costs because our country spends nearly double the amount per person on health care than any other industrialized nation, yet our population ranks near the bottom in health outcomes compared to other high-income countries.

There are reasonable ways to reduce costs such as increasing transparency in pricing so that consumers know what they are paying, allowing the government to negotiate the prices of prescriptions so that our seniors can access affordable prescription, and increasing the use of technology.

I’m excited to hear about the potential solutions to this problem so that patients can get the care they need. I look forward to hearing about how we can modernize and streamline this process so that doctors can stop wasting time haggling with health insurance companies and continue to make the lives of patients and their families better.


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