Plan for the Day and Plan for the Stay: Effective Utilization Management

Despite the passing of sixteen years, I remember the challenge as if it was yesterday. I had recently assumed the role of Chief Medical Officer for a large, acute-care, flagship hospital located in the midwestern United States. The CEO, a highly experienced hospital administrator, explained the dire predicament of the hospital: “Our average length of stay (ALOS) is killing us! We need to reduce our ALOS by at least 2.0 days within the next 6 months or we may need to close the doors.” That was, indeed, an eye-opening conversation and an extremely challenging assignment. Given the vast majority of our inpatient admissions were capitated, Medicare admissions, our daunting mission was to implement an effective utilization management system whereby we effectively reduced ALOS from 6.5 days down to revenue-saving 4.25 in less than 5 months. Our plan was called: “Operation Plan for the Day and Plan for the Stay."

In keeping with the well-established practice of prospective payment methodology (e.g. DRG payments), acute-care hospitals in the Emirate of Abu Dhabi (and soon, Dubai) are reimbursed a global fee for a particular DRG (Diagnostic Related Grouping) regardless, generally, of the overall length of stay. In general, the longer a patient lingers in a hospital bed, the more costly it becomes for the acute-care hospital provider. Therefore, efficient and effective use of precious resources, within an acute-care hospital, is absolutely key to financial viability under a prospective payment system. I would take this one step further and argue that efficient medical care is inherently high quality care whereas inefficient care is, by definition, poor quality care. In short, excellence in quality and excellence in financial management must be truly aligned. The purpose of this article is to discuss some the key tenants of highly effective utilization management and therefore aspire to reach the optimal alignment of quality and cost. 

“It Takes a Village…”

High quality healthcare, especially within the confines of an acute care hospital is truly a team sport. Managing and coordinating the “right care, with the right patient, at the right time” requires a highly organized, multi-disciplinary team approach. Clinicians, nurses, therapists, case managers, and social workers must be in alignment on effectively and efficiently treating patients in a timely manner. Needless delays are not only costly but they tend portend a lower quality of care. It would be worth noting that treating patients timely, efficiently and effectively the first time is a much cheaper proposition than having to either re-treat patients and/or incur time and expense treating avoidable, iatrogenic (hospital-acquired) illnesses and/or injuries. It is now standard of care for clinical teams to work together with clear lines of communication and responsibility to effectively manage patients. Long gone are the days of the “Lone Ranger” physician managing patients through orders, uninterpretable notes, and by fiat. Today, efficient acute-care hospitals utilize dedicated Hospitalists to oversee the clinical management of patients, while working very closely with engaged nursing staff and case managers, the second set of physician "eyes and ears."

“Strategic Planning…”

Each admitted patient is, in essence, a mini-strategic project.  And as with all projects the timeless adage is a truism: “Fail to plan; plan to fail.” Therefore, it is crucial to develop a mini strategic plan for each patient admission. I call it: “the plan for the day and the plan for the stay.” In more than 75% of acute admissions, patient care can be successfully predicted, planned and implemented, assuming that clinical plans have been developed for each patient. At or even before the actual admission it is crucial that the attending physician (e.g. most responsible physician) in collaboration with nursing and case management, and, of course, the patient and family develop the anticipated discharge plan and then work backwards to make certain all the components of the plan are successfully implemented in a timely manner. Test results need to be followed up, consultations need to be managed, and procedures/surgeries must be conducted, on schedule, as clinically appropriate. There are many moving parts to this complex orchestra with every note critical to the outcome of a harmonious symphony. 

“Getting Ahead of the Curve.”

Prospective and concurrent utilization management are critical to ensuring a successful and efficient clinical outcome. Prior to a planned admission it is critical to inquire: Does the planned hospitalization match with the diagnosis and interventions intended? And during the hospitalization, in real time, is continued stay warranted, based upon the clinical condition of the patient? In both cases clinical expertise is needed to help analyze the complex needs of the patient in coordination with analysis of the social needs of the patient and their families. Case managers and clinical social workers must collaborate with physicians, nurses and therapists in a multidisciplinary manner to ascertain the progress of the patient, and the ongoing needs, thereof. An added advantage of prospective utilization management is the opportunity to avoid unnecessary hospitalizations when lower levels of clinical care (e.g. day surgery, home healthcare, outpatient services, etc…) may be more appropriate and much more convenient for patients and their families. In addition, effective utilization management may also involve both quality assurance and risk management, to make certain that timely, safe and appropriate medical care in being rendered to the right patient and the right time. 

“Hindsight is Always 20-20…”

Effective and efficient utilization management does not end with the successful discharge of the patient. Case management support is needed to follow up with the patient and family to ascertain the post-discharge status of the patient, if the patient is following discharge instructions, and whether the patient is following proper use of medications. Similarly, post-discharge follow up is critical to making certain the patient is able to follow up with all planned outpatient visits. In keeping with “after-action reports” it also imperative to conduct retrospective utilization review to better understand whether the hospitalization appropriately and efficiently achieved the stated goals and objectives. And if there are delays or “medical misadventures” along the way, retrospective utilization management affords the medical team and the institution the opportunity to conduct a version of a Failure Mode and Effects Analysis (FMEA) to more clearly understand the how they can improve upon the safe, effective and efficient management of patients in the future. In essence, retrospective utilization management is a hallmark of continuous quality improvement. In addition, retrospective utilization management is an extremely important tool in revenue cycle management by enabling submission of clean reimbursement claims and the mitigation of costly insurance denials. 

“Making it Work…”

As I look back on my initial foray into effective utilization management, what I learned sixteen years ago is still very true today. Effective utilization management is integral to providing the right care to the right patient at the right time. Poor quality healthcare is inefficient and often times, ineffective, thereby resulting in a poor patient experience and more costly care. In an era where value-based healthcare is essential to all payors, it is crucial that providers are able to demonstrate exceptional quality outcomes pursuant to competitive, sound pricing. In short, optimal utilization management is truly a team sport predicated upon clear lines of communication and a multi-disciplinary approach to patient care. 

“Good quality is less costly because of more accurate diagnoses, fewer treatment errors, lower complication rates, faster recovery, less invasive treatment, and the minimization of the need for treatment. More broadly, better health is less expensive than illness.” ― Michael E. Porter, Harvard Business School. Redefining Health Care: Creating Value-Based Competition on Results