Solving the Mystery of Healthcare’s Soaring Cost With Efficient Utilization Management

Imagine a patient who went through a minor bypass surgery and was admitted to the hospital for 5 days. After his discharge, he religiously followed the prescription for 2 days. 

However, with a lack of knowledge regarding the proper routine to be followed, he was not able to adhere to his medications and returned to the previous lifestyle before falling sick. 

Result: It was similar to what was expected. The patient got sick and was admitted again to the hospital. This readmission did not just spoil the rating of the hospital but also incurred heavy out-of-pocket bills for the patient. Not to mention the long-term adverse effects on the health of the patient. 

All of this could have been avoided if only the patient had an idea of what he should have done and the hospital had an idea of how to manage the utilization of that patient. 

Why is utilization management such an important yet less discussed activity?

According to a 2016 HCCI Health Care Cost and Utilization Report, the out-of-pocket spending for patients up to the age of 65 years rose to 3.6 percent, a growth increase from 2.9 percent in 2015. Patients paid an average total of $848 of their own money for their healthcare in 2016. This reflects an $88 increase since 2012, the researchers said.

These statistics depict how improperly following up on the post-treatment performance of the patient and non-adherence to the utilization standard can cause an immense clinical and financial setback to the organization. 

Utilization management is a crucial element of healthcare to ensure that not just patients receive the care that they deserve, but also the hospital taps in on every financial opportunity. The current healthcare system focusses on care, cost, and delivery. There is no proper communication between providers and payers, and providers face difficulty in accessing the right information at the right time. 

Utilization management can help in promoting sustainable use of resources while ensuring the quality of care. 

What is the ultimate aim of utilization management? 

A holistic utilization management strategy is aimed at enhancing the use of healthcare resources and improve the quality of the care provided. Moreover, the major aims of utilization management include: 

• Improving the quality of the care provided to patients without compromising on the care-delivery procedure and administrative efficiency
• Addressing the clinical requirements of patients and streamline the inpatient and outpatient care services procedures
• Evaluating the appropriateness and efficacy of the health plans, the care services they provide, and the performance of the care facilities

What should be the ideal utilization management strategy?

Utilization management cannot be standardized for every organization. However, they should ensure the following aspects in their network to control their resource utilization: 

• Holistic data- Securing the key to every revolution

Healthcare is the goldmine of data, and the value that it offers is incomparable to others. With healthcare data expected to increase to 2,314 exabytes by the year 2020, the only way to drive efficiency in healthcare is by utilizing this critical element. Compliance, integrity, and ease of usage should be the primary elements of a data platform that is used to store this crucial data. With all the data at one place, it would be easier for providers and care teams to analyze and keep in check the utilization of patients at an individual and population level. 

• Patient experience- The holy grail of effective utilization

The rule of thumb that is to be followed here is that any patient who has a better experience will never be a high-utilizer of clinical resources. A study was conducted on 20 adult patients admitted to the ED. 

They were classified into two groups, where 9 patients were selected to provide care at home while 11 of them received usual care at the hospital setting. After the complete care procedure, they were analyzed on admission/discharge rates and post-discharge performance. 

The results were astonishing, as the patients who received home care showed the lesser average direct cost for acute episodes with nearly half the value of the other group. Clearly, the patients who were surrounded by family members in a comfortable environment were low-utilizers. 

• Care management- The driver of this low utilization struggle

Care management forms the binding element between right data and good patient experience. With the right data comes the right insights, and with right insights, hospitals can drive the right care management interventions that they need to undertake to ensure the best care experience for the patient. From delivering all the insights to care managers to engaging patients in their care journeys, all steps lead to one single goal of enhancing the healthcare resource utilization. 

The road ahead

Crafting the perfect healthcare experience is not just a task- it is a piece of machinery with multiple cogs working together to ensure its proper functioning. Utilization management is the process that is directly linked to the process of improving ROI while providing quality service. Not just for patients, this process is crucial for providers to enhance the quality of care by enhancing the care coordination process and for payers by promoting evidence-based care. From the process of improving the data intake process to enhancing the episode management process, everything is aimed at only one thing- improving the resource utilization of organizations. 

To know more about how you can leverage a data activation platform to enhance the utilization management, get a demo. 

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This blog has originally been authored by Abhinav Shashank.