Utilization Management: History, Types, and Evaluation of Processes

This report provides a detailed overview of utilization management, a combination of financial, administrative, and clinical methods used to assess the appropriateness of healthcare services. It defines utilization management and differentiates it from utilization review, highlighting the importance of ensuring competent and efficient healthcare delivery. The report explores the history of utilization management and the guidelines that inform its practices. It then delves into the different types of utilization management, including concurrent review and discharge planning, prospective review, and retrospective review, detailing the processes and purposes of each. The report also critiques utilization management, acknowledging concerns about cost considerations potentially overshadowing the primary goal of healthcare and the potential for care delays. The report concludes by mentioning that physician repayment is likely to drive utilization management in the future.

Running head: utilization management 1
Utilization Management
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Utilization management refers to a combination of financial, administrative, and clinical
methods used to assess the correctness, amenities, procedures, and care providers that are
useful to either the total patient population or an individual. The assessment methodology
usually customs evidence established procedures to make decisions. On the other hand
utilization management can also be defined as conventional techniques used by or on behalf
of healthcare purchasers benefits to achieving the cost of health care by prompting the patient
care policymaking through assessments of cases of the correctness of care preceding to its
provision.
Utilization management is done to ensure that healthcare is provided competently and
proficiently for the population and patient, where such activities directly impact the quality of
the outcome. This is not the same as the utilization review old impression that was done to
assess care cost. Utilization review refers to a structure that looks over the correctness of
medical necessity and level-headedness of delivered or projected services to a patient as an
individual or an assemblage of patients (Fritz, Brennan, & Hunter, 2015). The utilization
review is carried out based on prospective, concurrent, and retrospective to minimize
preventable incidence and inadequate services provision. The utilization review process
serves the purpose of improving service quality, that is the outcomes of a patient and
guarantee the effective spending of money (Krishnaswami, Sidney, Sorel, Smith, & Ashok
2019).
Clinical case appeals, concurrent planning, pre-certification, and discharge planning are
utilization management efficient processes. It also consists of systematic procedures such as
peer reviews, concurrent clinical reviews. Besides, it consists of appeals presented by the

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patient, provider, or the payer — the program of utilization management comprised of
policies, roles, procedures, and criteria.
History
Utilization management history suggests that a few percent of employees covered were
projected to be affected in the United States. Additionally, several organizations are involved
in federal and state government regulation (Curto Einav Finkelstein et al., 2019).
Guidelines and Criteria of Utilization Management
The criteria of utilization management are guidelines (medical) that may be formed in the
house, obtained from a merchant or obtained and adjusted to twinset local conditions. The
instructions should mirror evidence based care (Emanuel, 2017). However, a difference is
observed between best practice and cost-effective suitable care value, with guidelines of the
payer insisting on the effectiveness of the cost. The payer and the provider may develop
conflicts, for example, is the outcome does not improve ((Krishnaswami, Sidney, Sorel,
Smith, & Ashok 2019).
Types of Utilization Management
1. Concurrent review and discharge planning
The simultaneous review refers to resources management by assessing medical services use,
processes and care level necessity, efficiency, and appropriateness while a patient is in a
facility. The concurrent review usually happens or transpires for the vital or non-compulsory
acute hospital admission. This suggests that the importance of concurrent review is to provide
a health care that is effective and proficient, to minimize the manifestations of over/under, or
misapplication of inpatient services and finally to bring out best consequences and the safety

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of the patient all through an inpatient stay (Rasu, Bawa, Suminski et al., 2015). Equally, with
the preceding approval procedure, the concurrent review is linked to other care processes
comprising effective intensive care of the patient during his or her stay in the hospital.
Directing with discharge planning and recognizing suitable succeeding care levels.
The concurrent review also assists in recognizing patients who may be advantaged from
disease and other case management and data transfers to finance for suitable compensation.
Concurrent review criteria can differ depending on the organization doing the services on
condition that it follows evidence based medicine guidelines. There are two criteria sources
recognized for concurrent review, namely: Milliman care guidelines and Qualis health
McKesson's interQual criteria (Rasu, Bawa, Suminski, et al., 2015).
On the other hand discharge planning refers to the process of positioning for the next patient
care level as they are planning to vacate the premise or facility and in this case it might be
considered part of the concurrent process (Hung, Lugo, & Mullins, 2019) Discharge planning
starts immediately the patients are first admitted to the hospital facility and puts into
consideration medical conditions, ecological and societal apprehensions, financial position
and other variables to ensure that patients acquire correct engagement and services once they
vacate the premise(Naugler, & Church, 2018). Discharge planning involves typically a team
effort consisting of social workers, principal and specialty physicians, nurses, and patients.
2. Prospective review
The prospective review is carried out at the beginning of the treatment or service. A
prospective study is also known as prior authorization or precertification. The review is
carried out before care is performed to eradicate or minimize unnecessary services. The
potential review may have the influence of either eliminating or controlling care that had
been suggested by the assessing providers (Patel, & Egeland, 2019).

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3. Retrospective review
Retrospective review is carried out at the end of the conducted service and assesses the
correctness of the process, timing, and setting in agreement with identified criteria. The
review often associates to the payment and may lead to denial of a claim. Money risk for
retrospective repudiation is usually brought by the provider (Patel, & Egeland, 2019).
In conclusion, utilization management has been critiqued for considering care cost as an
outcome metric, and this obscures the healthcare objective and possibly minimizes the value
of healthcare by mixing up care procedures with the care results. Several scholars have
pointed out that cutting down costs by insures is the effort of the criteria of utilization
management. It may result to an overenthusiastic possible denial of care as well as
retrospective payment denial. This may lead to care delay or unexpected financial threats to
patients.
Physician repayment will possibly drive utilization management future. Physicians in
California are going back to fractional or complete payment schemes. Payment refund has
made physicians to be more alert of the healthcare resource use, including the cost of the
resources.

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Reference
Curto, V., Einav, L., Finkelstein, A., Levin, J., & Bhattacharya, J. (2019). Health Care
Spending and Utilization in Public and Private Medicare. American Economic
Journal: Applied Economics, 11(2), 302-32.
Emanuel, E. J. (2017). Reforming american medical education. The Milbank Quarterly,
95(4), 692.
Fritz, J. M., Brennan, G. P., & Hunter, S. J. (2015). Physical therapy or advanced imaging as
first management strategy following a new consultation for low back pain in primary
care: associations with future health care utilization and charges. Health services
research, 50(6), 1927-1940.
Hung, A., Lugo, A., & Mullins, C. D. (2019). Modeling the Budgetary Impact of Payer
Utilization Management Strategies: An Adapted Framework Based on Lessons
Learned. Journal of managed care & specialty pharmacy, 25(8), 922-926.
Krishnaswami, A., Sidney, S., Sorel, M., Smith, W., & Ashok, R. (2019). Temporal Changes
in Health Care Utilization among Participants of a Medically Supervised Weight
Management Program. The Permanente journal, 23.
Naugler, C., & Church, D. L. (2018). Clinical laboratory utilization management and
improved healthcare performance. Critical Reviews in Clinical Laboratory Sciences,
55(8), 535-547.
Patel, M., Egeland, R., & Egeland, B. (2019). U.S. Patent Application No. 10/332,627.

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Rasu, R. S., Bawa, W. A., Suminski, R., Snella, K., & Warady, B. (2015). Health literacy
impact on national healthcare utilization and expenditure. International journal of
health policy and management, 4(11), 747.