HMO moves to mend fences with doctors. (Short Takes).

UnitedHealth Group has announced that it is taking a step that once would have been considered almost sacrilegious for an HMO. It is closing its utilization review department. The Minnetonka, Minnesota-based managed care giant says that it has come to the conclusion that its UR division, which cost about $128 million to operate last year, was more expensive than the savings it generated. Its UR program was already approving 99.1 percent of all doctors' decisions, so UnitedHealthcare wondered if it was just creating hassles for its providers, UnitedHealth had tested this concept by eliminating utilization review from six of its member plans as part of a pilot project. UnitedHealthcare is the health insurance division of UnitedHealth Group.

Utilization review has long been one of the managed care tools most despised by physicians, so eliminating it could have some significant public relations benefits for the HMO. In recent years, UnitedHealth has invested heavily in amassing and analyzing patient data to evaluate whether its member physicians were complying with accepted medical practices and standards. According to the company's Medical Director, Lee Newcomer, MD, "That quality measurement program is the reason we felt comfortable doing this." Newcomer says that instead of trying to micromanage physicians, they will be looking at broader outcome measures of physicians' performances. For example, the company looked at whether doctors prescribed beta blockers after heart attacks, whether they monitored glucose levels of diabetic patients, and whether they gave mammograms to women over age 50.

UnitedHealth Group's new policy will not apply to mental health coverage. Company officials say they haven't had a chance to study how their new policy would work in this area. One of the challenges they face is that there are few objective tests available to assess what type of psychiatric care, if any, is needed in a particular case.

The move to eliminate utilization review by UnitedHealth Group has drawn strong support. Jeannine Rivet, Chief Executive of UnitedHealthcare, said that members from all over the U.S. were calling in to thank her for the change. That, she said, was a new experience, since members usually only call in to complain.

Judy Waxman, Director of Government Affairs at Families USA, applauded the move, saying, "Consumers would be thrilled not to have to wait the extra time, and doctors would be thrilled not to be second-guessed by clerks. Why wouldn't other plans jump on the bandwagon? If it saves money and makes people happier, it's a no-brainer." Renowned health economist Uwe Reinhardt, PhD, voiced his support. He noted that other industries found out long ago that micromanaging and interfering with their workforces was unproductive, and he wondered why it took ten years for HMO executives to figure this out. President Clinton said, "Good for them. I applaud them. And they're large enough that they might really be able to do it and have an impact."

James A. Hawkins is Publisher of Healthcare Briefings, a newsletter available in print, on cassette, via fax. and on computer disk. He can be reached at 800/338-5486.