Skip to main content

A Blueprint for Next Generation Utilization Management

As much as the practicing medical community recoils at the thought of prior authorization (PA), the need to address inappropriate and unnecessary medical care remains paramount. In 2012, Berwick and Hackbarth estimated the cost to society of overtreatment to be between $158 billion and $226 billion. A 2019 update to this estimate approximated the cost of overtreatment or low-value care to be between $75.7 billion and $101.2 billion. (The latter study used more conservative cost assumptions that likely explain most of the discrepancy between the two estimates.) Other similar data suggests that low-value care contributes substantially to health care costs. For example, the Washington Health Alliance — a regional health improvement collaborative based in Seattle — estimated that between 2014 and 2017, $703 million was spent in Washington state on low-value care.

While the intent of PA is to improve care and lower cost, the PA industry has been criticized for creating unnecessary delays in care, placing undue burden on providers and patients, and lacking transparency in terms of PA guidelines and their supporting evidence. Moreover, while there is some evidence to suggest that PA reduces health care costs, there is very little published data that describes the impact of PA on outcomes. Due to increased attention of the medical community to structural causes of health disparities, concerns about the impacts of PA on health equity have also been raised.

There is agreement in the health care community on a core set of principles to improve the efficiency of PA and reduce provider burden. These principles include:

  • Automating PA processes to reduce turnaround times
  • Interoperability to enable efficient exchange of information
  • Forward-facing criteria so providers know up front the basis for utilization review decision making
  • Data-driven targeting of PA services
  • Gold carding

However, even when all these strategies are implemented, PA will still be limited in its scope and effectiveness, and unable to fully embrace and contribute to achieving the Quadruple Aim: Better patient experience, better population health, lower cost and improved provider work life. The answer is to transform utilization management (UM) into a data-driven, evidence-based, collaborative and transparent process that fully embraces the Quadruple Aim.

The opportunity exists to engage a practice community with data and convene a collaborative effort aimed at assuring local provider buy-in to UM guidelines and improving quality of care. This can be done by connecting to and leveraging existing forums or partnerships, such as regional health improvement collaboratives or advisory groups to state agencies that purchase large amounts of health care. The ensuing dialogue may lead to any number of improvement activities, including efforts to improve guideline clarity, joint efforts to educate providers about best practice, and efforts to address underuse and disparities in access to care. As envisioned, the collaboration would be a multipayer effort, likely best implemented at a statewide level to assure comprehensiveness and efficiency in the application of agreed-to guidelines.

Convening a provider community to transparently develop or endorse evidence-based guidelines, including the use of data to prioritize guideline development, assure rigorous and reliable guideline implementation, and evaluate outcomes, is a challenging endeavor for the field of UM, but it can be and, in fact, has been done.

Download our new white paper to learn how UM can be transformed to achieve the Quadruple Aim of better patient experience, better population health, lower costs and improved provider work life.

Add new comment