Controlling Costs and Changing Patient Care? The Role of Utilization Management (1989) / Chapter Skim
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Executive Summary
Executive Summary
Pages 1-12
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Rather, we find a series of working hypotheses and partial solutions that Ire continually revised, discarded, and even reinvented as changes oc~ur in medical technology, social values, economic conditions, and other circumstances. In this preliminary report, the Committee on Utilization Management by Third Parties of the Institute of Medicine examines one current working hypothesis-that external review of the appropriateness of proposed medical services for individual patients can improve the way care is provided and, as one consequence, help constrain health benefit costs.
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One recent survey reported average cost increases from 1987 to 1988 of 14 percent for employers with insured health benefit plans and 25 percent for employers with self-insured plans. In the private insurance sector, many commercial insurers, Blue Cross and Blue Shield plans, and-HMOs have seen substantial losses, and some commercial insurers are withdrawing from the group health insurance market.
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Despite hese limitations, the committee believes that available evidence, taken together, indicates that utilization management has had some impact on health care use and costs. Specifically: · Utilization management has helped to reduce inpatient hospital use and to limit inpatient costs for some purchasers beyond what could be expected from other factors such as growth in outpatient resources, changes in benefit plan design, and shifts in methods for paying hospitals.
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Third, utilization management in the private sector operates under few explicit legal restrictions. There is, however, considerable awareness among review organizations and major purchasers of the legal risks inherent in efforts to influence patient care decisions and operationalize the terms of health benefit plans.
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The reasons for these developments ire several. First, the initial savings from shifting the site and tinning of care save largely been realized, and the survival of review organizations may lepend on their continuing ability to affect benefit costs.
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RECOMMENDATIONS FOR THE NEAR TERM The committee believes that utilization management has sufficient promise that a number of short-term and long-term efforts should be made to promote its positive potential and guard against its shortcomings. A prudent course in the near term is for the parties involved in utilization management purchasers, review organizations, physicians, and patients to accept greater responsibility for the reasonable and fair conduct of utilization management and the appropriate use of medical care.
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From page 7... ...
When organizations perform prior review and high-cost case management for individually purchased insurance plans (with no employer sponsorship) , they have a particular responsibility to provide good educational materials and appeals processes for beneficiaries who have no employer or other sponsor to act as their agent and aid.
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On five basic issues, the committee agreed that health care practitioners and institutions are responsible for · cooperating with the reasonable efforts of payers, including utilization management, to ensure that payments are for appropriate care within the terms of a patient's benefit plan; · constructively challenging unreasonable utilization management programs and specific decisions that threaten patient safety or damage patient privacy; · informing patients about treatment options, risks, and benefits and then considering their preferences; · seeking to ensure that patients get needed services, which may mean locating an alternative source of care if the patient cannot pay and the provider cannot give free treatment; and · staying current with scientific literature on the necessity and effectiveness of medical services in their areas of practice. Although some difficult situations with insurers and review organizations may be more conveniently and quickly dealt with in the short term by misrepresenting patient symptoms, diagnoses, or treatments, the committee believes that it is in the patient's, physician's, and society's interest over the long term for physicians to deal honestly with reviewers and claims administrators and to challenge questionable criteria, procedures, and decisions directly.
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The challenge for those involved in health care delivery and financing is to help all kinds of patients make informed decisions about getting or not getting care. LONGER-TERM RECOMMENDATIONS AND QUESTIONS As noted earlier, the committee views utilization management as, essentially, a working hypothesis-one of several partial and overlapping strategies for balancing health care expenditures, access, and quality.
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It is expensive, methodologically troublesome, and slow to pay off. As part of the overall strategy for containing total health care costs and improving the appropriateness of health care for all citizens, the committee urges federal and private consideration of carefully targeted research projects to test prior review and case management strategies and build methodologies for documenting the effects of ongoing programs.
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However, premature or misguided regulation to accomplish this could stifle worthwhile innovations, lock in ineffective methods, or so paralyze utilization management that purchasers abandon it for more onerous methods of controlling their costs. The experience of the federal government in overseeing peer review organizations (PROs)
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From page 12... ...
Answering them demands more information and more thoughtful debate over how to judge the strengths and weaknesses of utilization management versus those of other strategies to control costs and influence patient care decisions. This, in turn, will depend on better evidence about the impacts of different cost containment strategies.
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