Hospital Utilization Management as a Cost Containment Strategy

As complex as the healthcare industry can be, saving money is a goal shared by all stakeholders.

Healthcare systems and hospitals, insurance companies, and patients all want to keep the cost of healthcare low. Effective cost containment strategies in healthcare support this shared objective.

How can your organization reduce high costs for healthcare organizations without compromising the quality of care provided? 

Identifying Opportunities for Cost Containment Strategies in Hospitals and Health Systems — and for Payers as well

There are many potential targets for healthcare cost containment strategies in terms of providers. Cost reductions could potentially come from process changes and improvements in any number of clinical or administrative areas.

Let’s focus on reducing costs related to utilization management, as changes here can benefit both payers and providers.

Utilization management has become an area where the following processes are all too common: 

  • High levels of communication and delays related to waiting for responses
  • Disjointed or misaligned sharing of crucial patient information
  • Cycles of denials and appeals 

Denials and appeals, and other time-consuming processes cost the healthcare industry hundreds of millions of dollars per year

Additionally, current workflows can lead to an adversarial relationship between providers and payers. When processes are inefficient, communication must increase to supply data and context.

Extended waits for providers to return calls can turn a collaborative effort into just the opposite, similar to the frustration experienced when denials are caused by siloed views and misaligned information.

However, utilization management can become a more collaborative effort between providers and payers.

When these organizations come together to determine standards for inpatient admission, for example, they can reduce administrative work. Touchless status determinations aren’t just a future possibility — this concept is already used by payers and providers to optimize workflows, to the tune of 83% faster approvals on qualifying cases in a recent time study.

Artificial intelligence and predictive analytics can reduce the administrative burden typically associated with utilization management. It can also support cost containment strategies for nurses and other clinicians, as well as payers. When specialized technologies highlight and share the most relevant information, providers and payers save time and money.

By sorting patients based on the most relevant data, clinicians can be directed to the most pressing cases. At the same time, more straightforward cases can be quickly determined, saving time for everyone involved.

The result is a more efficient approach to utilization management – one that also focuses more on the patient and less on the processes. This is an effective cost containment strategy that benefits healthcare providers and payers alike.

Turning Utilization Review Into a Cost Containment Leader

Cost containment strategies don’t need to focus only on trimming budgets.

Changing burdensome, inefficient, and often adversarial processes can yield especially positive results. By becoming more collaborative and prioritizing the sharing of information related to utilization review and management, providers and payers can realize a positive change without making compromises about quality of care.