Controlling Costs and Changing Patient Care? The Role of Utilization Management (1989) / Chapter Skim
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Utilization Management: Introduction and Definitions
Utilization Management: Introduction and Definitions
Pages 13-26
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From page 13... ...
After Michael leavers is admitted to the hospital following a myocardial infarction, the hospital aware of his benefit plan's requirements-notifies the appropriate utilization management organization. The length of stay is discussed, but no explicit target date for discharge is set.
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From page 14... ...
However, widespread application of this approach to managing health care utilization is a phenomenon of the 1980s. A survey conducted In 1983 reported that only 14 percent of corporate benefit plans required prior approval of nonemergency admissions to hospitals (Equitable Life Assurance Society of the United States, 1983~.
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From page 15... ...
Companies that self-insure assume all or most of the financial risk of paying for covered medical services used by employees and their dependents instead of paying an outside insurance to accept that risk In the private insurance sector, many commercial insurers, Blue Cross and Blue Shield plans, and HMOs have seen significant underwriting losses $3.6 billion for commercial carriers and $1.1 billion for Blue Cross and Blue Shield plans in 198% (Donahue, 1989~. Some commercial insurers, for example, Kemper, Provident Mutual, Allstate (for large groups only)
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From page 16... ...
· Are there unintended positive and negative consequences of bringing an outside party into the process of making decisions about patient care? · Are utilization management organizations and purchasers suffi ciently accountable for their actions, or are new forms of oversight, perhaps government regulation, needed?
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From page 17... ...
A second, more focused, strategy is high-cost case management (see Bible 1-2~. Prior Review Prior review provides advance evaluation of whether medical services proposed for a specific person conform to provisions of health plans that
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From page 18... ...
Reviewers may press for timely discharge planning by hospital staff and, in some instances, assist in identifying and arranging appropriate alternatives to inpatient care. In addition, a patient may be required to get a second opinion on the need for certain proposed treatments from a practitioner other than the patient's physician.
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From page 19... ...
Since this latter practice usually makes patients unhappy, many utilization management firms try to consider restrictions in a client's health plan in their determinations. Retrospective denials of claims following prior certification appear to be rare, as are refusals to preauthorize services.
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From page 20... ...
Retrospective Utilization Review Utilization management techniques, particularly prior review methods, attempt to overcome the disadvantages and unhappiness associated with retrospective review and denial of claims after services have already been provided. Retrospective claims and medical record reviews can, however, support and reinforce utilization management by .
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From page 21... ...
The different strategies for influencing decisions about patient care, however, vary in their emphasis or reliance on different models of control (such as professional self-regulation, informed consumerism, or prudent purchasing) , their techniques of influence (such as education, financial incentives, peer pressure, or external oversight)
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From page 22... ...
The committee has no informa~cion about what utilization management firms spend on evaluation (for internal use or for clients) or how much different employers invest in systematically assessing the impact of prior review or other cost-containment strategies.3 Competition and Evaluation The normal individual and organizational biases against systematic evaluation may be both mitigated and intensified in competitive environ 3The private sector is not alone in providing meager resources for program evaluation.
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From page 23... ...
Forces Behind Rising Health Care Costs The Committee on Utilization Management by Third Parties also recognizes that the forces behind rising health care costs are exceptionally strong and difficult to constrain through moderate means. Many believe that, for the foreseeable future, health care costs will continue to increase faster than costs in the rest of the economy.
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From page 24... ...
Nonetheless, one estimate, now many years out of date, is that every additional physician results in $400,000 in additional Yearly expenditures for medical services. The concern about the millions of Americans who have no routine health insurance coverage is generating various proposals to protect these individuals through, for example, state-sponsored insurance pools, mandated employer-based insurance, expansions of Medicaid, and universal federal health insurance (Congressional Research Service, 1988~.
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From page 25... ...
Babel, Jon, DiCarlo, Steven, Fink, Steven, and de Lissovoy, Gregory, "Employer-Sponsored Health Insurance in America," Research Bulletin of the Health Insurance Association of America, Washington, DC, January 1989. Babel, Jon, Jajich-Toth, Cindy, de Lissovoy, Gregory, and Cohen, Howard, "The Changing World of Group Health Insurance," Health Affairs, Summer 1988, pp.
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From page 26... ...
Physician Payment Review Commission, Annual Report to Congress, Washington, DC, April 1989. Project HOPE, A Study of the Preadmission Review Process, Report prepared for the Prospective Payment Assessment Commission, Chevy Chase, MD, November 1987.
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