Utilization Management – Better Healthcare per Dollar
The latest approach of utilizing evidence-based medicine may be a key in further advancing healthcare reform
By Jay I. Pomerantz, MD – Executive Medical Director for Health Integrated
Utilization management, by definition[1], could be defined as, “The evaluation of the appropriateness, medical need and efficiency of healthcare services, procedures and facilities according to the established criteria or guidelines and in a cooperative effort with other parties, including members, groups, providers and payers to optimize the appropriate placement of patients to receive the appropriate services/supplies.” Quite a mouthful. This is but one definition, but it contains the key elements. Simply put, the goal of utilization management (UM) is to provide the most appropriate care based on case-by-case assessments. If accomplished, costs can be optimized as well.
This is a topic that books, seminars and careers have been based and hence, I will offer some of my thoughts today, and likely add more in future posts. I would welcome your comments as well.
In many cases, today’s system is structured such that barriers must be overcome in order to prescribe healthcare diagnosis, procedures and treatments. The system mandates that in order to move to the next treatment or diagnostic tier, this barrier must be hurdled; a new barrier is then set which must be leaped and so forth. If you can overcome the barrier(s), you can move on. It is complicated and in many cases can create a procedural triage versus one based on the physician’s medical judgment. Is this the best way to provide optimum healthcare while reducing cost though?
Probably not.
In a McKinsey study which references research by John Wennberg, MD[2], it highlights the fact that variances in the application and utilization of services (and related costs) is not correlated with better care quality. He quotes that over 30% of Medicare expenditures go toward unnecessary or wasteful care. Not surprising. Among his many thought-leading concepts, Wennberg supports the premise that objective evidence and outcomes are preferred to physician preference as the basis for treatment decisions. Additionally, he has championed the involvement of the patient in the healthcare process in so much as being supportive of sharing the benefit/risk information regarding therapeutic options with patients. Armed with this information, the patient then can actively participate in their own healthcare. I have written about this before[3]. It has clearly become a trend that patients are more educated and they also believe it is their responsibility to be involved in their own healthcare.
To this end then, not only is UM targeted at the healthcare provider or physician, but the patient plays a key role as well. When UM is coordinated with all of the stakeholders, the results can be optimally affected. This approach seems to be a better option to the scripted, one-size-fits-all triage tactic, where every alternative other than the prescribed choice is blocked with hurdles to overcome if a different path is advocated. Both the physician and the patient feel the UM approach is more customized for their circumstance and hence will provide better outcomes. The oh-by-the-way here, is that the incorporation of a successful UM program will likely provide better outcomes as well as lower costs.
Cost will always come into play. One challenge to the adoption of UM is the perception that the cost spent in administration to determine the best care alternatives offsets (and therefore reduces) the monies available for procedures which can actually provide better patient outcomes. The idea that this is an either/or scenario may not be the correct conclusion to draw. It seems that one of the premises of UM is to acknowledge the competence of the physician and hence put them back in charge of the appropriate treatment based on evidenced-based medicine. The vast collection and analysis of available utilization data within healthcare organizations today, provides this key evidenced-based information to the physician. By allowing the physician to make these data-driven decisions regarding a patient’s care, it is clearly perceived to be less onerous and the physician will feel less obstructed in their practice of medicine. I believe the related outcomes and cost metrics will bear this out as well.
It seems that the UM process may be further augmented by drawing from the past. McKinsey suggests that a reinvigoration of some aspects of ‘traditional’ medical management may not be a bad thing as well. Although most health plans still incorporate core elements, further focus may yield additional results. A new focus on case management, pre-authorization of services through automation (via information technology) and a refocus on good old prevention through physician intervention and counsel may combine to further advance both the clinical and financial benefits.
What do you think?
Thanks for reading and I welcome your comments. Since we are expanding the focus, I would also welcome your thoughts on topics that would interest you. Please contact me directly at healthexecforum@healthintegrated.com or you can comment directly in the blog.
Best Regards,
Jay I. Pomerantz, MD
[1] http://medical-dictionary.thefreedictionary.com/Utilization+management
[2] http://www.servinghistory.com/topics/John_Wennberg
[3] Patients getting more control of their healthcare, http://blog.healthintegrated.com/index.php/2010/05/19/patients-are-getting-more-control-of-their-healthcare/
