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Not Just "All or None"
 With most of
the increases in health care costs of the last 10 years shifted to
the employee, there has been little incentive for health insurers to
pursue the focused, effective management of health care resources.
In fact, during this period, there was a general revolt by consumers
against prior authorization requirements and denial of care that did
not meet evidence-based criteria. Now, however, with a weakened
economy sparked by the burdens of higher energy costs and declining
housing values, it appears consumers are less willing to continue to
accept the shifting of additional costs on top of the continuing
rise in the overall cost of health care. This presents an opening
for insurers to craft a medical management program that includes a
utilization management component that will, at a minimum, reduce the
future rate of increase in health care costs and premiums.
Utilization Management
Utilization management
and medical management are not synonymous terms;
utilization management is but one of medical management's three
components, with the others being network development and management
and quality management. The misperception that they are synonymous
stems from the fact that utilization management is the component
most familiar and visible to health care providers.
Many people see utilization management as an "all or none"
phenomenon. The "all" is viewed as an arbitrary and capricious,
"scorched earth" approach to managing health care resources, one
characterized by a strategy of review and denial. On the contrary,
the hallmark of superior utilization management is the influencing
of the course of care that the patient receives so as to achieve
optimal health care for the insured member. Optimal health care
is defined as the care the patient requires provided at the
lowest cost and accomplished within the parameters and constraints
of the insured's benefit plan, provider contracts, and statutory
regulations.
The guideposts for this journey to provide influence along
the health care delivery continuum are evidence-based guidelines.
Which care and services are subject to review and the variation in
the stringency with which the evidence-based guidelines are applied
determine whether the health care resources are loosely, moderately,
or tightly managed. The level chosen should be the one likely to
achieve the outcome desired. It is important to recognize that the
strategic intent of this endeavor is to achieve high-quality,
cost-effective health care for the insured member.
Critical to success are experienced clinical personnel who
understand the benefit plans, policies, and guidelines and who have
both the ability and willingness to debate and discuss the health
care being delivered to the insured members.
With well-structured and executed utilization management,
coupled with an effective negotiation program (as detailed in the
second-quarter 2008 Nolan newsletter), the cost of care can be
significantly reduced—even with a loosely-managed approach.
Increased attention to the management of health care resources
improves both the efficiency and quality of the care delivered.
System Support
Using the appropriate software
allows for consistency in both clinical review determinations and
adjudication of claims. Internet-based guideline applications, such
as Milliman, Interqual, and Hayes Technology Assessment, give ready
access to routinely updated evidence-based guidelines and clinical
information. CodeReview and Red Book are examples of software that
support effective claim adjudication. These allow for maximum
efficiency in making not only the initial claim and clinical review
decisions, but in giving ready access to pertinent clinical
information when in direct discussion with a provider or when
reviewing an appeal of a previous denial.
Legal Support
One frequently overlooked but
critical component of an effective medical management program is
legal support. For maximum effectiveness, the legal department
should provide at least one experienced health care attorney to be
involved as an ad hoc member of the medical management department.
Activities would include participation in developing and
implementing contracts, reviewing guidelines, and defending against
any legal challenges of medical management decisions.
An attorney who understands the goals and objectives of the
medical management program and participates in the development of a
strategy that avoids legal pitfalls is far preferable to one who
regularly vetoes any endeavor that includes even a scintilla of
legal risk.
Medical Management
Since the largest portion of the
premium dollar funds health care services provided to the insured
members, the effective management of these resources always allows a
unique opportunity to create a sustainable competitive advantage for
the insurer. In order to capitalize on this opportunity, the insurer
must employ knowledgeable, experienced medical professionals to
oversee the delivery of clinical services to members, with the focus
resting equally on quality and the cost-effectiveness of care.
Crucial to the success of the medical management program is the
medical director. The medical director must provide leadership,
training, and mentoring to nursing personnel; take the lead in both
development and acquisition of the guidelines and policies used in
making medical necessity determinations; and provide input and
support across the organization. All medical management personnel
(and the medical director in particular) must be capable of
articulating certification decisions to physicians, institutional
providers, and internal constituencies.
To remain relevant and provide the outcome desired, an
effective medical management program requires commitment, consistent
decisions, and effective oversight. We at Nolan have experience with
both "all" and "none" and would be pleased to discuss the issue or
help you find appropriate positioning for your organization in
between.
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