Why Utilization Management is Important in Healthcare

Smiling Healthcare ProfessionalsAs the continued efforts to improving patient outcomes and decreasing costs continue in healthcare, utilization management in hospitals becomes a necessity. This allows the costs for inpatient care to be reduced as options like home-based care is explored.

While this is generally a positive concept, some concerns have been raised about how healthcare professionals are using the system and questioning the efficacy of this tool. It is important to develop a deeper understanding of this subject because it can be an amazing strategy to reduce costs and improve healthcare.

What is Utilization Management?

According to the Institute of Medicine (IOM), utilization management covers all forms and procedures of healthcare services. It is a set of strategies used on behalf or by the consumer of healthcare benefits to manage patient care dues and determine the best use of facilities. It influences the patient through a case-to-case valuation of care preceding its provision.

Types of Utilization Management

• Retrospective Review – In this process, the assessment of procedure, timing, and setting are done after the service is completed. This type often relates to reimbursements and may result in denial of a claim.

• Concurrent Review – This is done during the course of the care or treatment. Intervention may occur at several intervals and may involve discharge planning, coordination, and transitioning.

• Prospective Review – Also known as prior authorization, this review is rendered at the onset of the service. Its goal is to reduce or eliminate any unnecessary service.

The healthcare industry is constantly changing, but its goal of providing better care to people remains the same. It’s crucial to explore data models to find the best ways of minimizing costs while delivering quality services. Utilization management is only one of the many methods of improving healthcare, but it stands out for enabling patients to enjoy healthier lives at minimal costs.