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How Case and Utilization Management Can Reduce Medical Waste

By Jennifer S. Kiesewetter | Oct 4, 2017

The U.S. spends approximately $3 trillion annually on health care, as reported by the Centers for Disease Control and Prevention (CDC), which amounts to almost 18 percent of the Gross Domestic Product (GDP). The Wharton School, citing a report by Bloomberg, reported that the U.S. is the third-most expensive country for health care expenses, with Norway and Switzerland leading the way.

Case and Utilization Management's Opportunity

Despite this spending, when it comes to efficiency — based on life expectancy and health care costs per capita and as a percentage of GDP — the U.S. ranked 50th out of 55, the Wharton School noted.

As a country, we're paying more and getting less. According to a 2012 Journal of the American Medical Association paper, as reported by the Wharton School, health care waste, "which includes unnecessary treatments, overpriced drugs and procedures and the under-use of preventive care that can fend off more serious illness, makes up a whopping 34 percent of the U.S.' total health care spending."

In light of these trends, trustees must look for tools that help reduce these rising costs while maintaining, or improving, quality of care for members. One way to do this is to integrate case and utilization management tools with medical providers.

Chronic Conditions and Other High-Cost Conditions

Eighty-six percent of the nation's total health care spending is for chronic conditions and mental health conditions, according to the CDC. In 2014, seven- of the top-10 deaths were linked to chronic diseases, with cancer and heart disease taking the top two spots. Further, in 2012, approximately 50 percent of adults had at least one chronic health condition while 25 percent had more than two. Chronic health conditions aren't just pervasive, they're expensive.

Providing high-value care to members will allow members to receive effective care. Case managers can cut health care costs by reducing unnecessary utilization, suggesting lower cost alternatives and recommending appropriate diagnostics procedures and treatments while understanding the underlying costs, according to TCS Healthcare Technologies. For example, some doctors may order expensive screening tests, such as MRIs, for chronic pain complaints when physical therapy may be a better alternative. Case management integrated with medical providers can help direct appropriate treatment in these situations, providing effective relief for the member.

Educate Members on Health Care's Importance

Member education is also key to providing quality care with cost-effective treatment. Members may ask for an antibiotic for an upper respiratory infection or allergy testing when they don't have any symptoms, the Wharton School explained. Having access to educational materials will give patients better access to high-value care.

Many members mistakenly assume that doctors know the prices of medicines or tests when they prescribe or recommend these services. Mitesh Patel, professor the Wharton School, explained in the article, "A lot of the tests and treatments patients get — in fact, most of them — are prescribed based on habits [from] training." Having case managers work directly with members and provide needed education on their health needs will determine appropriate courses of action, including costs of services.

Case managers can also provide members with transparency tools, TCS Healthcare Technologies noted. This provides cost comparison of different health care services or other comparative price information. Such transparency gives members the ability to make better health care decisions. With case managers providing utilization management integrated with the medical providers, members will have access to high-value care and effective pricing.