Does utilization review reduce unnecessary hospital care and contain costs?

Abstract:

:Research indicates that approximately one in five hospital admissions is unnecessary or inappropriate, based on accepted clinical criteria. Various cost-containment approaches have been initiated to reduce unnecessary hospital care. Among these approaches, hospital utilization review (UR) has shown promise as a cost-containment strategy. Although third party payers are increasingly relying on UR and similar approaches to contain health care expenditures, little is known about the effects of these efforts. This study analyzes insurance claims data on 223 insured groups for 1984 through 1986 to determine the effects of a UR program instituted by a commercial insurance company. It was found that UR had a significant negative effect on both utilization and expenditures, even after controlling for a large number of factors. Specifically, UR reduced admissions by 13%, inpatient days by 11%, expenditures on routine hospital inpatient services by 7%, expenditures on hospital ancillary services by 9%, and total medical expenditures by 6%. Even though UR reduced the level of utilization and expenditures, it did not appear to influence the rate of change in these areas over time. These findings suggest that hospital UR programs can reduce utilization and expenditures and generate cost savings, thereby helping to improve the efficiency of medical care resources consumption.

journal_name

Med Care

journal_title

Medical care

authors

Wickizer TM,Wheeler JR,Feldstein PJ

doi

10.1097/00005650-198906000-00006

subject

Has Abstract

pub_date

1989-06-01 00:00:00

pages

632-47

issue

6

eissn

0025-7079

issn

1537-1948

journal_volume

27

pub_type

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