June 1999

Grant Results

SUMMARY

From 1992 to 1997, researchers at the University of Washington School of Public Health and Community Medicine evaluated the effects of utilization management on health care quality and access.

Utilization management — which includes hospital pre-admission review, concurrent (continued-stay) review, outpatient review and case management — is the most widely used hospital cost-containment strategy.

In this project, investigators determined the effect of utilization management on patterns of care and then compared re-admission rates among patients whose use of hospital care was limited by utilization management with patients whose care had not been limited by utilization management.

Key Findings

  • Patients are rarely denied hospital admission outright.
  • Utilization management reduces hospital utilization, particularly for mental health patients.
  • Utilization management may have an adverse effect on the quality of care provided to some patients who may face a higher risk of early re-admission as a result of restrictions on their length of stay.

Funding
The Robert Wood Johnson Foundation (RWJF) supported this project through a grant of $219,110.

 See Grant Detail & Contact Information
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THE PROBLEM

Developing effective health care cost-containment strategies has been a key health policy objective for well over a decade. The most widely used cost-containment strategy is utilization management, which includes hospital pre-admission review, continued-stay review, outpatient review, and case management.

More than 90 percent of all group health insurance plans, including managed care plans (HMOs and Preferred Provider Organizations [PPOs]), use one or more of these review activities.

Previous research had shown that utilization management has a measurable effect on hospital utilization and expenditures, decreasing the level of inpatient medical expenditures by roughly 12 percent. Little was known, however, about the effect of utilization management on quality of care, patient access, out-of-hospital expenditures, or health status.

Proponents have asserted that utilization management promotes quality by reducing unnecessary hospital care, but this claim had not been documented. Conversely, it has been argued that while utilization management may improve overall quality of care, it has the potential to reduce quality for selected patients by limiting their access to needed services.

In 1989, the National Academy of Science's Institute of Medicine (IOM) called for more research to study the effects of utilization management on the delivery of health care in a report entitled "Controlling Costs and Changing Patient Care: The Role of Utilization Management." Despite the widely acknowledged need for better understanding of utilization management and its impact on the health care delivery system, little research has been conducted since the IOM issued its report. A major obstacle to research has been the proprietary nature of utilization management data.

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THE PROJECT

The grant from RWJF supported research designed to evaluate the effects of utilization management on health care quality and access. The project was viewed as potentially useful in assessing and designing future cost-containment efforts. For the study, a major insurance carrier agreed to provide the data set needed to analyze the impact of utilization management on hospital care.

The study determined the effect of utilization management on patterns of care and then compared re-admission rates among patients whose use of hospital care was limited by utilization management with rates for patients whose care had not been limited by utilization management. The project involved a series of retrospective analyses of a cohort of insured individuals who had one or more utilization reviews performed between 1989 and 1993.

The initial study plan included data 35,000 utilization management decisions made on CNA-insured patients around the country during this time period. Control patients were selected from among insured patient groups whose admission or length of stay was not subjected to utilization management. In addition, hospital discharge data from the National Hospital Discharge Survey for 1991–93 were used to construct condition-specific length-of-stay profiles that were used for several analyses.

The utilization management program used by the insurance carrier included three prospective utilization management procedures: pre-admission authorization, continued-stay review, and case management. Pre-admission review authorized the patient's admission and approved a specified number of days for the initial stay. Concurrent (continued-stay) review evaluated and approved requests for subsequent days beyond the initial stay. Case management was used to monitor and control expenses and treatment services for high-cost patients.

The utilization management program was compulsory and required reviews of all admissions to short-term general hospitals, psychiatric hospitals, and substance abuse treatment centers.

The investigators conducted two broad analyses of the effects of utilization management 's effects on access to care: (1) the frequency of denials of a hospital stay resulting from pre-admission review, and (2) the reduction in requested length of stay (the difference between the number of days of care requested by the physician and the number of days approved by the utilization management review) resulting from continued-stay review.

The effect of utilization management on quality was analyzed by examining re-admissions following restrictions imposed by utilization management on length of stay. While early re-admission is an imperfect measure of substandard quality, it is widely used and generally considered to be a valid indicator of quality, the investigators say.

The insurance carrier originally agreed to provide detailed data on utilization management certification that could be directly linked with claims data. Because of staff changes at the insurance carrier's home office, there were significant delays in obtaining the utilization management data. An unexpected claims data, however, were ultimately not obtained, which limited the scope of research questions that could be addressed.

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FINDINGS

  • Among mental health patients, restrictions imposed on length of stay increased the likelihood of early re-admission. On average, patients had their hospital stays reduced by six days, which translated into an estimated 30 percent increase in re-admission risk. Patients with alcohol or drug dependence had the greatest restrictions imposed by utilization management. Almost all mental health patients, regardless of diagnosis, were authorized for the same number of days of care at admission.
  • Among general adult medical patients, utilization management rarely denied hospital admission outright. Hospital admission was denied outright in fewer than 1 percent of cases reviewed. Hysterectomies accounted for the largest number of admission denials. Patients who were required to obtain outpatient care instead of inpatient care typically had requested in-patient treatment for hernia repair, drug or alcohol dependence, or hemorrhoid surgery.
  • Utilization management became more restrictive over time in approving care, especially for mental health patients. In 1990, utilization management approved, on average, 20.7 days of inpatient care for each mental health patient, compared with 10.9 days in 1993. Statistically significant reductions in the number of days approved also occurred among medical and surgical cases.
  • Among pediatric patients ages 12 through 18, utilization management had the greatest impact in restricting inpatient care for mental health problems. Like adult patients, pediatric patients were rarely denied care outright as a result of utilization management, although utilization management also became more restrictive over time in approving care for pediatric patients. Restrictions imposed on length of stay among pediatric patients admitted for medical or mental health problems increase the risk of subsequent early re-admission.
  • Among patients with cardiovascular disease, utilization management for those who were surgical patients significantly increased the relative risk of re-admission. Utilization management restricted length of stay for 9 percent of surgical patients by two or more days. These patients were, increasing the relative risk of re-admission within 60 days by 2.7 times more likely to be re-admitted within 60 days than surgical patients whose length of stay was not restricted by utilization review. For cardiovascular disease patients who were initially admitted under a medical diagnosis, utilization management had little effect on re-admissions.

Communications

An analysis of utilization management's impact on patterns of care in mental health was described in an article published in the April 1995 issue of the American Journal of Psychiatry. An analysis of treatment restrictions imposed by utilization management and their effect on psychiatric re-admissions's was published in the June 1998 issue of Medical Care, and an analysis of the effects of utilization management on patterns of hospital care among privately insured adult patients was published in the November 1998 issue of Medical Care. An analysis of the impact of utilization management on care delivered to injured workers through workers' compensation was published in August 1999 in the Journal of Occupational and Environmental Medicine. An analysis of the impact of utilization management on hospital re-admisisons for patients with cardiovascular disease is forthcoming in Health Services Research. Presentations of the findings were made at several scientific and professional conferences. (See the Bibliography for complete information on publications and presentations.)

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LESSONS LEARNED

  1. Acquiring needed data from outside sources is an ongoing challenge for researchers. Problems and delays encountered in this project resulted from a turnover in key management and analysis staff within the insurance company. New management staff were less interested in the project and less willing to commit resources to ensure the timely delivery of data. More explicit collaborative arrangements may be needed in order to do reliable health services research. Incentives, such as a small reimbursement to organizations for providing data, site visits by the researchers, or providing the organizations with timely information about the progress and findings of research projects, may strengthen their commitment to research projects.

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AFTER THE GRANT

The principal investigator is conducting further analyses of the data. He plans two papers. The first, focusing on mental health patients, will present more detailed analyses of treatment requests, length of stay restrictions, and re-admission risk. A second paper will present a cost-benefit analysis of utilization management.

The principal investigator is also working on unrelated research projects under two of RWJF's national programs, the Substance Abuse Policy Research Program and the Workers' Compensation Health Initiative.

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GRANT DETAILS & CONTACT INFORMATION

Project

Effects of Utilization Review on Health Care Quality and Access

Grantee

University of Washington School of Public Health and Community Medicine (Seattle,  WA)

  • Amount: $ 219,110
    Dates: June 1992 to November 1997
    ID#:  019977

Contact

Thomas M. Wickizer, Ph.D.
(206) 616-2983
tomwick@u.washington.edu

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Articles

Lessler DS and Wickizer TM. "The Impact of Utilization Management on Readmissions among Patients with Cardiovascular Disease." Health Service Research, 34(6): 1315–1329, 2000. Abstract available online.

Wickizer T, Lessler D and Travis KM. "Controlling Inpatient Psychiatric Utilization Through Managed Care." American Journal of Psychiatry, 153(3): 339–345, 1996. Abstract available online.

Wickizer T and Lessler D. "Do Treatment Restrictions Imposed by Utilization Management Increase the Likelihood of Readmission for Psychiatric Patients?" Medical Care, 36(6): 844–850, June 1998. Abstract available online.

Wickizer T and Lessler D. "Effects of Utilization Management on Patterns of Hospital Care Among Privately Insured Adult Patients." Medical Care, 36(11): 1545–1554, 1998. Abstract available online.

Wickizer TM, Lessler D and Franklin G. "Controlling Workers' Compensation Medical Care Use and Costs through Utilization Management." Journal of Occupational Medicine and Environmental Health, 41(8): 625–631, 1999. Abstract available online.

Wickizer T and Lessler D. "Effects of Health Care Cost-Containment Programs on Patterns of Care and Readmissions among Children and Adolescents." American Journal of Public Health, 89(9): 1353–1358, 1999. Abstract available online.

Wickizer T and Lessler D. "Cost Savings Associated with Utilization Management." Unpublished.

Wickizer T and Lessler D. "Administrative Costs Incurred by Physicians and Nurses Complying with Utilization Management Review Procedures: How Big Are the Real Costs?" Unpublished.

Presentations and Testimony

Thomas Wickizer and Daniel Lessler. "Does Utilization Management Affect the Quality of Care? Analysis of Readmission Rates Among Privately Insured Mental Health Patients" at the 123rd Annual Meeting of the American Public Health Association, San Diego, Calif., October 1995.

Thomas Wickizer and Daniel Lessler. "Containing Costs while Maintaining Quality: An Unresolved Dilemma within Mental Health" at the 13th Annual Meeting of the Health Services Research Association, Atlanta, Ga., June 1996.

Thomas Wickizer and Daniel Lessler. "The Impact of Utilization Management on Hospital-Based Care for Patients with Cardiovascular Disease" at the 13th Annual Meeting of the Health Services Research Association, Atlanta, Ga., June 1996.

Thomas Wickizer and Daniel Lessler. "Containing Health Care Costs through Utilization Management: Searching for the Beef" at the 124th Annual Meeting of the American Public Health Association, New York, N.Y., November 1996.

Thomas Wickizer and Daniel Lessler. "The Effects of Utilization Management on Mental Health Readmissions" at the 124th Annual Meeting of the American Public Health Association, New York, N.Y., November 1996.

Thomas Wickizer. "Impact of Utilization Management on Access and Quality of Health Care" at the 1997 Northwest Conference on Health Policy, Seattle, Wash., June 1997.

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Report prepared by: Kelsey Menehan
Reviewed by: David Kales
Reviewed by: Richard Camer
Reviewed by: Molly McKaughan
Program Officer: Nancy Barrand

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