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Utilization Management essay
← International negotiationQuality Management Analysis →

Utilization Management. Custom Utilization Management Essay Writing Service || Utilization Management Essay samples, help

Utilization management is a set of techniques used by or on behalf of purchasers of health benefits to manage health care costs by influencing patient care decision making through case by case assessment of the appropriateness of care prior to its provision. Saunier (2011) says that utilization management programs serve to manage resource utilization within those parameters to contain cost, while ensuring appropriate care is provided. According to Saunier (2011), when utilization management programs are incorporated into health care provision, the degree of practice variation and the amount of inappropriate care are reduced. 

Mission statement

The mission of Memorial HealthCare IPA utilization management plan is to ensure reliable provision of the high quality health care and best possible member outcomes. Saunier (2011) says that this is attained through the development of a wholly incorporated multidisciplinary health care network and harmonization of all clinical and organizational services.           


The purpose of the utilization management plan is to offer a detailed process of evaluation of inpatient and outpatient medical services together with behavioral health. The process ensures the provision of medically essential, optimally achievable, quality patient care through proper use of the hospital resources in a cost proficient and appropriate manner (Saunier, 2011).  


The program is designed to monitor, evaluate and manage the quality and cost of healthcare services delivered to all Memorial HealthCare IPA members. It, therefore, gives fair and consistent evaluation of medical necessity and appropriateness of care through nationally accepted standards and guidelines (Olaniyan, Brown & Williams, 2011).


The goals of utilization management program are to encourage, grow and support the resourceful use of patient care resources, develop and apply resource utilization measures and metrics and appraise patient care practices. The third goal of the utilization management plan is create a custom of intelligibility by opening processes and procedures to peripheral review and uninterrupted development. Olaniyan, Brown & Williams (2011) further say that the program also examines both inpatient and outpatient care for probable eminence of care insufficiency, making use of transfer indicator viewing standards.


There are various objectives of the Memorial HealthCare IPA, Inc utilization management program. The first objective is to come up with a system of examining the extent of time during the treatment of patients. This is achieved by using numerous standard and customized reports as assessment tools to project and graphically present performance (Olaniyan, Brown & Williams, 2011). The second objective is to set up and put into practice on paper utilization management rules and standards pertinent to the evaluation of therapeutic obligation for inpatients and outpatients (Saunier, 2011).

The third objective of the utilization management program is to design and organize a plan for Memorial HealthCare IPA, Inc that records the various quality issues from utilization management to quality administration. The fourth objective is come up with increased utilization management tactics and procedures as essential to meet healthcare provider necessities (Olaniyan, Brown & Williams, 2011).    

Authority and Responsibility

The IPA board of directors is the principal body for the utilization management program. The board administers the program’s implementation and coordination. They also evaluate and endorse on yearly basis the utilization management program. The yearly analysis commends policies and procedures to be used in health care services (Olaniyan, Brown & Williams, 2011). Medical directors play the role of ensuring that the Memorial HealthCare IPA, Inc utilization management program is well developed and put into proper use. The medical directors report directly about the program’s progress to board of directors.

Utilization management committee plays the role of supervision and providing direction of all utilization management functions, which involves the judicious development and realization of an effective utilization management program (Olaniyan, Brown & Williams, 2011). The committee plays the role of educating members about the areas that need improvement within the program.

The department structure of Memorial HealthCare IPA, Inc recognizes a medical director to be a designated senior physician. The medical director provides leadership and direction to the utilization management committee. On the other hand, the primary care physician runs the whole spectrum of care of the members he or she has been assigned. Olaniyan, Brown & Williams (2011) noted that the behavioral health practitioner coordinates with the medical director and plays the role of implementing behavioral healthcare features of the utilization management program.

The other important personnel of the Memorial HealthCare IPA, Inc include the director utilization and quality management, who administers functions in the program and manager of utilization management, who provides oversight of inpatient and case management programs. Olaniyan, Brown & Williams (2011) noted that the inpatient case managers include licensed nurses, and social workers, who are in charge of daily utilization evaluation of acute hospital. Other members of the department structure include hospitalists, internal case managers, and utilization manager coordinators.

Utilization Review Process

The utilization review process is engaged in the assessment of aptness of care provided by Memorial HealthCare IPA, Inc. The review process helps to monitor and guide care besides ensuring efficient use of accessible resources with allocation towards the most cost effective and clinically designated treatment plan. Memorial HealthCare IPA, Inc has designed its utilization review process in such a way, that they do not restrain or coerce patients from seeking or continuing to use medically necessary and suitable psychiatric services (Saunier, 2011). The major areas of Memorial HealthCare IPA, Inc utilization management review process include medical information, prospective review, direct referrals, referral determinations, timelines of review decisions, emergency services, direct access to services, denials and appeals and grievances (Olaniyan, Brown & Williams, 2011).

Concurrent Review

Concurrent review is the managementof resources by evaluating the necessity, appropriateness and efficiency of the use of medical services, procedures and levels of care while a patient is in a facility.  Varkey (2010) noted that IPA utilization management case manager, hospitalist and discharge planner check inpatients on a daily basis to deliver efficient, effective health care. Concurrent review helps to reduce the occurrence of over, under, or misuse of inpatient services and to promote the best outcome patient safety during an inpatient stay. Concurrent review also initiates the discharge planning process. This is because discharge planning is usually a team effort involving nurses, social workers and primary and specialty physicians (Varkey, 2010).

Retrospective Review

Memorial HealthCare IPA, Inc conducts retrospective review to evaluate health care interventions and charges after the care has been delivered and the bill is submitted. Varkey (2010) argues that retrospective review determines whether the care was appropriate and provided at the most efficient and effective level with the best outcomes. The appropriateness of services utilized is confirmed by nurses, physician leaders and medical directors (Tubbs, Husby & Jensen, 2011).        

Behavioral Health

Memorial HealthCare IPA, Inc evaluates sites of service and levels of care for behavioral health services (Saunier, 2011). The organization expects behavioral health providers to give follow up information to the PCP and the PCP is expected to track the patient after he or she is referred to the prospective provider.

Case Management

Memorial HealthCare IPA, Inc begins case management with identification of at risk members. Primary care and other areas are used to assess the member’s clinical and psychosocial status by evaluating their medical record information and their history (Olaniyan, Brown & Williams, 2011). At risk diagnosis include HIV/AIDs, CVA, COPD, insulin dependent diabetes, head injuries, extensive burns and head stage heart diseases.

Other Communication with health Plans

These include encounter data submitted via tape and denial letters, which should be sent to the necessary health plan, bed day reports, end-stage renal disease reporting to all health plans, organ transplants and clinical decision making (Tubbs, Husby & Jensen, 2011). Members of the health plan should be contacted every time a member is referred for assessment involving organ transplants.

Annual Program Evaluation

Annual program evaluation is conducted to evaluate department performance and achievements in all the activities within a year. The utilization management program is evaluated annually to comply with the National Committee for Quality Assurance (NCQA) and standard requirements (American College of Medical Quality, 2005). The aim is to measure the effectiveness of the program. Tubbs, Husby & Jensen (2011) indicated that the evaluation also entails assessing ongoing activities and trends discovered in the utilization management program. It also determines if or not the program meets the goals and objectives for the year.

Annual Program Activities

The utilization management program details annual program activities and the related timings for completion dates. The activities include change in resources, audits, organization, policies and procedures (Tubbs, Husby & Jensen, 2011). The work plan is developed in December by the director of utilization management together with the medical director and utilization management team. Afterwards, the report id is presented to the board of directors for approval. Quarterly reports are produced to measure and determine progress.  

Two Weaknesses of the Organizations Utilization Management

Practical evidence on the effects of the Memorial HealthCare IPA, Inc utilization management program is fairly limited and suffers from a number of methodological weaknesses.  The first weakness of the program is on the basis that impact of the utilization management program on net benefits costs is less clear (Tubbs, Husby & Jensen, 2011). Savings on inpatient care have been partially offset by increased spending for outpatient care and program administration. Tubbs, Husby & Jensen (2011) noted that this weakness can be offset by moving care to outpatient settings, where fewer controls on use and price now operate.

The second weakness of utilization management program is that it focuses on the unnecessary use of the hospital, rather than the actual need for a particular service has been the main target. Olaniyan, Brown & Williams (2011) say that to offset this weakness the primary strategy should be discussion and negotiation about appropriate care. In addition, the utilization management program should expand its review of the actual need for specific procedures to ascertain that the clinical foundation for such assessments becomes more important.

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