Where It’s Going
Where It’s Not Going
Author: John C. Goodman
What Covid Public Policies Got Right
COVID forced all states, including Connecticut, to grant far greater leeway to patients and providers in managing care. Physicians could practice across state lines, restrictions on telehealth were dropped, nurse practitioners and other nonphysician providers were granted greater power to treat patients, and hospitals no longer had to beg the permission of states to offer…
Prior Authorization Seems to Work for Drugs
We study the trade-off between bureaucratic costs and reductions in moral hazard induced by managed care tools in healthcare…. Prior authorization reduces a drug’s utilization by 26.8%. Half of marginal beneficiaries are diverted to another related drug, while the other half are diverted to no drug. These policies reduced drug spending by $96 per beneficiary-year (3.6% of drug spending), while generating approximately $10 in paperwork costs. Revealed preference approaches suggest that the net cost savings exceed beneficiaries’ willingness to pay for foregone drugs.