Utilization Management as a Cost-Containment Strategy

Utilization Management as a Cost-Containment Strategy by Howard L. Bailit and Cary Sennett Utilization Management (UM) is now an integral part of most public and private health plans. Hospital review, until recently the primary focus of UM, is associated with a reduction in bed days and rate of hospital cost increases. These reductions appear to have had limited impact on aggregate health care costs because of increases in unmanaged services. In the future, with electronic connectivity between payers and providers and the use of clinical guidelines and computer-based decision-support systems, the need for prospective case-level reviews will be reduced. With these changes, UM programs are likely to become more acceptable to providers and patients. Introduction The great majority of Americans are now enrolled in privately or publicly funded health plans that use Utilization Management (UM) programs as a primary Cost-Containment Strategy . This includes 90 percent of privately insured employees and all Medicare and Medicaid participants (Sullivan and Rice, 1991).

Medical care utilization and costs at the program and system levels and the quality of care. (A brief description of the major UM programs and the history of UM can be found in the Technical note.) Individual program utilization and costs Inpatient medical and surgical review

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  Management, Cost, Care, Strategy, Containment, Utilization, Utilization management as a cost containment strategy, Care utilization

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