An exploratory cost analysis of performing hospital-based concurrent utilization review.

OBJECTIVE: To determine the costs associated with conducting concurrent utilization review, a utilization management strategy widely used by the managed care industry. STUDY DESIGN: A production process model focusing on resource utilization. SUBJECTS: The 29 clinical services of a 500-bed academic health center were aggregated into 9 clinical groups. A random sample of at least 15 reviews per group was studied. METHODS: Time sampling and cost analysis methods were used to determine the cost to the hospital of conducting utilization review. Component activities of the process were identified and analyzed to determine differences among clinical services and among the component tasks of the utilization review process. RESULTS: In 12 months, 13 126 reviews were completed in an average of 15 minutes 41 seconds. Across clinical groups, the average total time of each review ranged from 11 minutes 18 seconds (medical group) to 19 minutes 4 seconds (pediatrics group). Significant differences existed among clinical service groups for the activity of preparing for conducting the review, with the pediatrics group spending more time than the cardiology and oncology groups. The total cost of the process was nearly dollar 166 000 annually. The average cost per review was dollar 11, the average cost per patient-day denied was dollar 478, and the average cost per patient denial was dollar 1592. CONCLUSIONS: These figures are conservative in that they do not include the payer component of the costs, which could be as high as the hospital provider cost. Given a denial rate of < 2% and the high cost of the process, it may be beneficial to investigate alternative processes for conducting utilization review.

Mental health's contribution to the financial performance of a utilization management program.

Analysis of a national utilization management program covering approximately 3.4 million individuals from 1989 through June 1993 indicates that while only 6% of all hospitalizations were for a primary psychiatric or substance abuse diagnosis, over 44% of the program savings are accounted for by concurrent mental health utilization management. The cost of performing mental health utilization management is significantly greater than the cost of providing medical, surgical, and maternity management, but returns on investments are significantly greater for psychiatric and substance abuse than for these other diagnostic areas. Implications for health care reform inclusion of full mental health benefits are discussed.

At risk: a look at managing Medicare losses.

On top of declining Medicare payment rates, hospitals face the prospects of increasing numbers of Medicare patients and costs associated with caring for them. Geriatric care management programs can help prevent financial losses by focusing on high-risk patients and costly diagnosis related groups. Under one approach, a geriatric care manager works to improve the efficiency of care, reduce lengths of stay, smooth transitions to alternate care settings, and involve patients and their families in decision making.

A psychodynamic perspective on the clinical impact of insurance review.

The rise of managed care and concurrent utilization review has had a profound impact on the practice of inpatient psychiatry. Little has been written, however, on the clinical impact of the review process itself. The actions of insurance reviewers often result in their being incorporated into the psychopathology of individual patients and into the dynamics of families and institutional settings. The authors apply psychodynamic understanding to a series of case examples to illustrate how concurrent review may promote splitting, impede the patient's ability to separate from the hospital, and paradoxically reinforce the patient's illness. They also explore a number of typical responses of treatment staff and families to the review process. A case vignette demonstrating a sincere effort at mutual collaboration between payers and providers is also presented. This spirit of compromise is proposed as the solution that best serves patient care.

Onsite concurrent review: impacts on utilization, medical complications and expense.

An evaluation of onsite concurrent review over and above the effects of Aetna's precertification program demonstrated reduced utilization and expenses, especially for ancillary services, and no adverse effects on rates of medical complications.