The times in your life when you need medical attention are not usually ideal situations. And sometimes, the healthcare delivery maze only makes it worse. Running between healthcare providers, administrative teams, ambulatory surgery centers, insurance companies, pharmacies, technology providers, etc., can be taxing. And trying to acquire effective and outcome-driven patient care can feel like jumping through various hoops.
Robust utilization management in healthcare can streamline some of this for healthcare professionals and those seeking care. If executed well, it can play a critical role in improving the overall experience for everyone involved and enhance patient outcomes.
Let’s learn more.
How to Optimize Utilization Management in Healthcare
- What Is Utilization Management?
- Importance of Utilization Management
- Types of Utilization Management in Healthcare
- Benefits of Effective Utilization Management
- Utilization Management Challenges & Limitations
- How to Create a Utilization Management Process
- Utilization Management Examples
- Utilization Management Trends
Summarize this article for me pleaseWhat Is Utilization Management?
Utilization management in healthcare is the set of processes used to ensure the necessity, efficiency, and cost-effectiveness of healthcare service delivery.
In a study about the role of utilization management in healthcare, researchers state
“Utilization management builds on the gradual accumulation of experience and data that suggest that externally applied assessments of the appropriateness of proposed medical services can constructively influence how care is provided and, as one consequence, help constrain healthcare costs.”
A short history of utilization management
But first, a little history lesson.
In the post-depression era in the United States, private insurance grew as the most popular way of financing healthcare. During this time, several key trends emerged.
- Healthcare costs increased steeply. In the 50s, concerns emerged within the federal government around escalating costs, nudging them to work toward cost control
- This was followed by employer involvement in the 60s, where various large organizations—who paid for insurance—implemented their own utilization management programs for employee benefits
- On the other hand, studies showed that several medical procedures or treatments being recommended were unnecessary. This was seen as a big contributor to healthcare costs bloating Patient education became a critical part of medical service delivery
- As a result, consumers, third-party payers, and insurance providers needed a thorough process to ensure all services were necessary, appropriate, and cost effective
This resulted in healthcare utilization management as we know it today.
Summarize this article for me pleaseImportance of Utilization Management
In essence, utilization management is the process of objectively evaluating decisions around healthcare delivery. It is important for various reasons, such as:
Cost control: Healthcare costs have increased dramatically since insurance became the de facto model. This necessitates scrutiny of unnecessary hospitalizations, tests, and procedures, which results in utilization management.
Constant evaluation: Healthcare service delivery requires a certain level of oversight, which utilization management offers. It evaluates decisions throughout the process, ensuring continuous learning and improvement.
Care coordination: With multiple stakeholders involved in the healthcare delivery process, utilization management serves as the point of coordinating care for patients.
Advanced technology: Modern technology has enabled cheaper and more accurate ways to capture and analyze data at scale. Simple integrations with clinic management software make reviews efficient, cost-effective, and scalable.
As a highly critical process, different organizations take different approaches to executing utilization management. Let’s see how.
Summarize this article for me pleaseTypes of Utilization Management in Healthcare
Fundamentally, utilization management is of three types: Retrospective review, concurrent review, and prospective review.
Retrospective review
Utilization management began with a retrospective process, where reviewers examine historical data to assess the appropriateness of care delivered to the patient. After the service has been provided, reviewers look at:
- Claims for any billing errors, fraudulent activities, overutilization, etc.
- Medical records for appropriateness of treatment, adherence to standards, compliance, etc.
- Patterns to understand utilization and potential for preventative healthcare services
Concurrent review
Concurrent review happens during the service delivery. At this time, case managers monitor ongoing care to ensure it remains appropriate and necessary. This includes:
- Case management and coordination to ensure patients get the right care at the right time
- Length of stay reviews to ensure the stay is clinically justified
- Discharge planning and follow-ups as needed
Prospective review
Prospective reviews are a more recent phenomenon. This is a predictive sort of utilization management process conducted before the medical service is provided. Insurance providers evaluate proposed treatment options and pre-authorize them. Prospective reviews are primarily of two kinds.
- Pre-authorization: Evaluation and approvals for certain procedures to fit within the patient’s medical needs and insurance policy criteria
- Admission review: Assessments on whether hospital admission is necessary or clinically justified as part of the inpatient prospective payment system
It is important to note that these three types of utilization management aren’t mutually exclusive. Insurers can perform one or more of these for each case to ensure thoroughness and effectiveness.
For example, they might conduct concurrent reviews of a procedure with prior authorization to make sure it is performed as planned. Or, following a post-surgery retrospective review, the insurer might make prospective plans for follow-up procedures.
Here’s why that can be beneficial.
Summarize this article for me pleaseBenefits of Effective Utilization Management
The fundamental goal of utilization management in healthcare is to contain costs. However, there’s a lot more it offers for patients, healthcare providers, insurance companies, and employers/third-party payers.
Delivering appropriate medical care
Even though the focus is on cost control, the focus of utilization is on ensuring the healthcare provided is appropriate and necessary. As a result, patients are served better in the long run, leading to better health outcomes.
Eliminating service wastage
Utilization management acts as the double-check for the medical necessity and effectiveness of services. It also prevents patients from being unnecessarily referred to expensive specialists, tests, etc. It encourages physicians and healthcare providers to choose treatment paths with greater likelihood of success at lower costs.
Reducing claim denials
Utilization management policies require healthcare providers to submit complete, accurate, and well-supported claims that are less likely to be denied by insurers. This ensures that patients receive their rightful healthcare benefits.
Making data-driven decisions
With the advancements in big data and analytics tech, utilization management ensures that decisions around medical services are accurate and objective. It enables insurers and healthcare providers to come together to make better decisions for the patient and better manage healthcare costs.
Standardizing decisions
Evidence-based guidelines and criteria used by insurers helps standardize decisions around service delivery. It offers a consistent and largely predictable service to consumers/patients.
For all its importance and benefits, utilization management isn’t without its challenges.
Summarize this article for me pleaseUtilization Management Challenges & Limitations
The first and foremost challenge faced by the healthcare system with respect to utilization management is the tightrope between cost and quality.
Cost vs. quality
While the focus of utilization management is cost control, that shouldn’t come at the cost of service quality. Denying services for cost control can adversely affect patient outcomes. The margin of error in such cases is extremely low. Finding the right balance is a huge and critical challenge.
Admin work
Good utilization management requires data based on which decisions can be made. Collecting this data from various stakeholders, maintaining proper records, and analyzing them can be tedious. Any errors in documentation can also lead to denials or delays.
The data challenge and the enormity of its scale can not be addressed through manual efforts.
Delays and patient dissatisfaction
Insurance approvals and pre-authorizations are time-critical.
For the patient, even the slightest delay can be critical. The wait time is frustrating. Retrospective reviews can lead to claim denials, forcing the patient to pay out-of-pocket.
Utilization management can feel like unnecessary interference to the medical team. They might feel like you’re questioning their autonomy. A complicated submission process can take away valuable time from the medical staff, further frustrating them.
Ethical factors
There is a fundamental conflict of interest between cost and quality in healthcare. The financial incentives of declining claims might impact the medical needs of the patient.
There are also ethical concerns regarding the privacy, security, and confidentiality of sensitive patient information.
Technological limitations
Utilization management is a data-intensive process. The technology, software, and cloud infrastructure needed for these advanced analytical systems can be prohibitive for small businesses, pushing them to perform this manually. That, of course, brings with it issues of scalability, inefficiency, and delays.
On the other hand, most technical systems today are fragmented in silos with disparate data structures, making cleansing and pre-processing painful.
Several of these challenges can be overcome with a clear and thorough utilization management process.
Summarize this article for me pleaseHow to Create a Utilization Management Process
Creating a robust utilization management program requires a strategic approach and a comprehensive project management tool like ClickUp for healthcare. In this section, we demonstrate how you can use both.
1. Define utilization management objectives
Within your organization, clearly define the goals of your utilization management efforts. Include the scope of utilization management across various services and patient groups.
If cost containment is your primary goal, think about the compromises that you are willing to make to achieve that goal. Then, break it down into nested targets, like minimizing readmissions or increasing CSAT scores among patients.
ClickUp Goals is a great way to maintain all your targets in one place. You can also roll up progress across various tasks or cases you’re working on, streamlining your healthcare project management.
2. Set unambiguous utilization management guidelines
These are the criteria based on which you make decisions. Setting these guidelines clearly ensures consistency of experience for the patient and service providers. It also upholds service quality.
- Create a step-by-step map for every process you need to follow
- Take a patient-centric approach while doing this, prioritize their preferences and needs
- Assign responsibility to the right individuals for each part of the process
- Consider every small possibility and set out guidelines for it. For example, if you’re documenting an authorization process, draw a thorough flowchart
ClickUp Whiteboards offer the dynamic canvas you need to brainstorm, iterate, and design your processes. Use it to design foolproof workflows in collaboration with various stakeholders and subject matter experts.
3. Build a team and enable them
Utilization management processes need multiple people. So, bring together a multidisciplinary team and ensure they work well together.
Recruit: Hire experts and professionals, such as physicians, nurses, care workers, etc. It might be helpful if they already have a background in utilization management.
Assign: Define each person’s roles and responsibilities clearly. For instance, prior authorization requests need to be uploaded by physicians, while case managers conduct reviews.
Use ClickUp Tasks as your healthcare project management software to consolidate all information regarding patient care and claims. Use Custom Fields to track the data you need. For example, if you want to track readmissions, set that up as your custom drop-down or task type.
Use Custom Statuses to reflect your workflows. Securely share these task views with appropriate stakeholders for reviews, input, comments, etc.
Collaborate: Invite various stakeholders to get used to the collaboration platform. Encourage them to use ClickUp’s Whiteboards, Mind Maps, Chats, Comments, Clips, etc., to communicate effectively in real-time or asynchronously. Show them the best practices for accelerating decisions through collaboration.
Train: Conduct ongoing training programs for all team members. Keep an up-to-date record of the latest procedures, evidence-based processes, guidelines, and best practices. Use ClickUp Docs to curate and publish this information. Securely share data and control access from a central admin dashboard.
Create ClickUp Task Checklists to ensure the consistency of process execution. Make templates out of your custom checklists and automatically apply them to each Task as you need.
4. Set up effective data management
Your utilization management program needs a strong data foundation. Here are some key factors to consider.
Identify data you need: You might need metrics such as admission rates, readmission rates, medical procedures proposed, cost per case, etc. Set up Custom Fields to track all this.
Automate tasks: Set up ClickUp Automations for making calculations, triggering reminders, etc. to improve resource utilization.
For example, automate the workflow to calculate cost per case when there is a status change.
Create dashboards: Set up ClickUp Dashboards based on the metrics that are important to you. Customize widgets to track metrics in real time and make adjustments accordingly.
5. Re-evaluate regularly
Even the best of processes need to adapt to changes and evolve with time. So, set up continuous improvement processes.
- Monitor key metrics regularly
- Seek feedback from all stakeholders, patients, care providers, administrative staff, etc. Use ClickUp Forms to automate this and integrate feedback into the process
- Integrate external data sources for contextual and holistic visibility. For example, if you store copies of your policies in Google Drive or Dropbox, integrate them into ClickUp for a secure universal search
- Evaluate your processes and policies for compliance with evolving regulatory frameworks across healthcare, pharmaceuticals, technology, and data privacy
Based on your findings, improve processes. Use good patient management software and set up seamless experiences.
If you’re overwhelmed by the sheer scale of this activity, we understand.
Summarize this article for me pleaseUtilization Management Examples
Utilization management is a complex and sophisticated process, which needs large teams to implement effectively. Here are some examples of smaller processes for you to begin with.
Retrospective review example
Utilization management is par for the course of any surgical procedure. During the review, the reviewer will conduct the following:
- Recommendations: Making decisions about approving, declining, or putting claims on hold
- Medical records review: Evaluating data from discharge summary, rehabilitation, physician recommendations, etc.
- Claims data review: Studying the claims form to understand the appropriateness of the treatment, identifying unnecessary procedures, unduly long hospital stay, etc.
Concurrent review example
Concurrent reviews happen when the care manager performs utilization management duties as the medication is ongoing. It involves:
- Monitoring: Arranging rehabilitation services, medication, regular monitoring, or check-ups to prevent readmissions
- Case management: Performing care coordination to ensure patients get the right care at the right time
- Length of stay reviews: Reviewing hospital stay status each day to ensure that it is clinically justified
- Discharge planning: Working with care teams to coordinate discharge planning and continuity of care as needed
Prospective review example
A procedure, like an MRI or biopsy, often requires the insurance company’s pre-authorization. In such cases, the process is:
- Approval/decline: If all criteria match, the case manager approves the claim. If not, they might recommend alternative treatments
- Request: The medical team submits a request
- Evaluation: The case manager reviews the patient’s past data and current needs against medical standards and policy guidelines
In addition to the above, several new approaches to utilization are evolving.
Summarize this article for me pleaseUtilization Management Trends
The healthcare industry is evolving across three dimensions: Patient relationships, care models, and technological advancements.
Patient relationship
Patient education is growing increasingly critical across the globe. Patients, rightfully, ask about the exact nature and consequences of the care given to them. Therefore, in addition to the healthcare provider, if the insurer is involved in the decision, patients demand to be informed of their decisions transparently as well.
✅ Stay ahead of this trend by:
- Engaging the patient meaningfully and empathetically from the start
- Creating a culture of transparency in your organization, which extends to the patient as well
- Setting up tools and dashboards to make objective and effective decisions around patient care
Value-based care
The emerging value-based model prioritizes proactive and preventative approaches to healthcare. It recommends regular check-ups, monitoring, mental wellness, etc. to minimize hospital admissions, while improving health outcomes.
For patients who chose this model, insurers are designing policies incorporating prospective utilization management to minimize care costs as well as insurance premiums.
✅ Incorporate value-based care by:
- Strengthening preventative care policies
- Building a data-driven foundation for prospective reviews
- Redesigning care and incentivizing the right metrics
Technological advancements
Medical technology and health data have grown exponentially in the last few years. As wearables and trackers become more popular, there’s a lot that insurers can learn. Leverage technology by:
- Collecting, cleaning, standardizing, and using all available data
- Using advanced analytics and preventative models for utilization management
- Automating processes that don’t need human insight
Summarize this article for me pleaseSetup an Unshakeable Tech Foundation for Your Healthcare Org with ClickUp
Post-COVID, the healthcare landscape has transformed. The importance of mental health has become clearer (even at workplaces, for instance). Preventative healthcare is now a priority for most. The monitoring of health indicators, using wearables or at-home tests, are now table stakes.
These changes give insurers an incredible opportunity to optimize utilization as well as patient outcomes. To seize that opportunity, utilization management organizations need the right tools.
ClickUp is designed to be exactly that. The SOC2 and HIPAA-compliant software gives you complete control over patient data and experience. It connects various stakeholders effortlessly, enabling real-time collaboration. It helps care teams analyze data and make decisions that prioritize patient care.
Streamline utilization management processes. Try ClickUp for free today.
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