20 February 2015

Does Healthcare Utilization Management and Review Reduce Costs?

Are Healthcare Utilization Management and Review Strategies Effective in Reducing Costs?

With an ever-increasing emphasis on reducing costs while still improving patient outcomes, utilization management is taking on new importance. Inpatient care, ideally, is reduced as outpatient resources like home-based care are more frequently explored. However, issues frequently arise over how healthcare professionals are using utilization and review strategies, and even if the efficacy of the system makes it a beneficial tool. Utilization and review policies themselves are frequently attacked as being costly and ineffective. However, as healthcare is now defined, both management and review strategies are likely to remain a part of overall delivery systems, even if modified. Developing a better understanding of how utilization and review policies affect healthcare is important if reducing costs and improving outcomes for patient care are to result.

What is the difference between healthcare utilization and review strategies?

Although the terms utilization management and utilization review are often used interchangeably, they do not represent the same process. Each plays a different role in determining if healthcare is provided in a cost-effective, yet patient-friendly, way. So, what is utilization management? The best utilization management definition encompasses all forms of healthcare services, including all procedures, as well as the determining the optimal use of facilities. The management process is used to ensure patients have appropriate care and are provided all required services to maintain their health without overusing resources.

Utilization review, on the other hand, is retrospective, examining the diagnosis, treatment, and outcomes of patient care with an eye toward improving those functions in future situations. The goal here is to not only guarantee patients are receiving optimal care, but that inpatient procedures are carefully managed to provide better outcomes while, concurrently, managing resources. Careful analysis of patient care allows the development of improvement plans to optimize outcomes for future patients.

How are utilization decisions made?

Since utilization managers generally determine the type and level of treatment a patient will receive, medical professionals cannot afford to ignore the criteria used for preadmission and concurrent review procedures. Typically, the data required will include specific elements, allowing reviewers to verify the treatment recommended matches the conditions present. As a rule, reviewers will consider:

  • The diagnosis and how it was reached, including the patient’s symptoms and any test results.
  • A patient’s symptomatology is matched to currently accepted medical necessity standards.
  • Review of the physician’s determination of medical necessity.

Assuming the patient’s condition and the physician’s determination of medical necessity align with current medical necessity standards, the treatment is approved. If not, the reviewer will communicate the outcome, allowing the physician to examine the findings and appeal, if needed, or revise treatment protocols.

Why is a retrospective review important?

Today’s healthcare system demands steps be taken to deliver quality care while also controlling costs. That means inpatient data is meticulously inspected to determine if the best care was, in fact, provided each patient. The analysis would encompass areas including:

  • Making sure the treatment provided actually matched patient needs.
  • Ensuring all protocols were followed and those protocols achieved their goals.
  • Examining where potential improvements would expedite care or even make it possible to deliver care on an outpatient basis.

Retrospective reviews allow care providers and insurance carriers to use comprehensive data, putting long-term improvements in place designed to enhance outcomes for future patients. Because financial incentives are in place making it cost-prohibitive to have too many patients readmitted, retrospective review is certain to take on a more important role in the future.

What other aspects of healthcare delivery need further exploration?

Another aspect of healthcare delivery needing consideration today is population health management. Both insurance providers and healthcare professionals understand the importance of health management for specific groups, but older data collection methods and delivery systems made population management difficult, if not impossible. However, with new regulations making clinically and cost-effective solutions mandatory, more care delivery professionals are taking note. Data collection, analysis, and dissemination of information to members of a patient’s care team are taking on a new importance.

To meet that need, technology-driven, connected care management services like myNEXUS are delivering services to better manage patient needs while also collecting much-needed data. Using this type of service reduces costly clinic and hospital visits while, at the same time, keeping patients and the medical care teams up-to-date with current patient conditions. Medical professionals can easily monitor the data collected to identify developing or worsening conditions without having to schedule frequent office visits. Everyone wins, as costs are reduced and a patient’s healthcare status is constantly updated and, as a result, better managed. Furthermore, myNEXUS shares the risk with the health plan, adding value to the insurer.

Because the healthcare industry is constantly evolving, definitions of care language may change, but the goals will remain the same – deliver quality care while also minimizing costs. Properly exploring data models and implementing changes to the system will, ultimately, improve care. As new methods of care delivery are developed, the outcomes should continue to improve. Utilization management and review, coupled with services like myNEXUS, will enable patients to enjoy healthier lives while reducing healthcare related costs.

Category: myNEXUS News