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NEW OPPORTUNITIES IN UTILIZATION MANAGEMENT

A call to bring a risk-based, data-driven approach to healthcare

Overview

Healthcare organizations that want to increase value from utilization management—and improve provider relationships—need a risk-based, data-driven approach. By shifting from a disease-centric utilization management model to a network-centric one, healthcare organizations are realizing up to $20 million in total net financial savings and up to 80 percent reduction in the number of codes requiring review.

The need for this network-centric utilization management model is driven by the impact of the shift to the exchange model. By 2017, nearly one in five Americans will purchase benefits from a health insurance exchange, public or private. Payers are reporting significant losses in exchange markets, with several planning to pull out completely.

More healthcare organizations will likely face the same fate—disappearance from a growing market—if they do not evolve utilization management to align with a consumer market that has very different health characteristics.

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Benefits of Network-centric Utilization Management

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Key Findings

Little has changed about today’s disease-centric utilization management program that took shape in the 1980s. It is a one-size-fits-all, gatekeeper approach focused on disease states and high-cost, high-volume services identified by perception and customer requirements, not by data insight.

Even so, Accenture analysis of national and regional payer organizations across commercial, Medicare and Medicaid lines of business shows that utilization management does provide value. The question is not whether to do utilization management—it is how to do it better. By transitioning to a network-centric model, healthcare organizations can streamline their operations to significantly increase their return on investment (ROI.)

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Analysis

With a network-centric utilization model, healthcare organizations can identify unique network practice patterns and membership characteristics to inform decisions about prior authorization requests. This eliminates waste, lowers medical and administrative costs, reduces provider and consumer abrasion, and supports informed decision making.

Network-centric utilization management is built on several fundamentals.

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Recommendations

The shift to a network-centric utilization management model is a win-win-win:

  • Healthcare organizations increase ROI, achieve cost savings and streamline resource use in a dynamic market where effectively managing utilization of services and costs is a matter of survival.

  • Providers reduce administrative burden and costs and have a better understanding of health organizations’ utilization management requirements.

  • Healthcare consumers—who demand transparency and patient-centered experiences—continue to get the healthcare services they need.

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Authors

Brian Christian

Managing Director, Heath Management UM and Operations Lead

Noreen Fleming

Senior Manager - Accenture Health

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