The Physician and Administrator-Reported Cost of Drug Utilization Management to Physician Practices: A Cross-Sectional Survey

Background The use of drug utilization management techniques such as formulary exclusions, prior authorizations, and step edits has risen sharply during the last decade, contributing to growing administrative costs for physician practices. However, limited data exist on the extent of these administrative costs, with previous studies relying on data from over a decade ago. Objective The aim of this study was to assess physician and practice administrator experiences with drug utilization management. Methods A national survey was conducted between 9 February and 30 March 2021, targeting 925 physicians and administrators working at medical practices in the US. Time spent by physicians and their staff on tasks related to drug utilization management for prescription medications was collected and used to calculate the dollar value of that time. Results We estimated that physicians spent a median of 4.0 h per week on drug utilization management, while nurses spent 15.0 h and other staff spent between 3.6 and 10.0 h on drug utilization management per physician per week. This time was associated with a calculated median dollar value of $75,927 per physician per year. Extrapolating this estimate to a national scale suggests that time spent annually by physician practices on drug utilization management could be valued at more than $43 billion. Conclusions Drug utilization management results in significant time spent by US physician practices, which in turn, results in meaningful costs to these practices. As the prevalence of drug utilization management continues to grow, the impact on physician practices will remain an important topic.