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MEDICAL REVIEW INCREASINGLY COMMON AMONG HEALTH CARE PLANS

       MEDICAL REVIEW INCREASINGLY COMMON AMONG HEALTH CARE PLANS
    NEW YORK, Nov. 25 /PRNewswire/ -- Employers, determined to control mounting health care costs, are aggressively turning to utilization management to review medical treatment, both before and after a procedure, reveals a newly released nationwide survey by KPMG Peat Marwick, the international accounting and consulting firm.
    In the past, insurers focused on whether medical events should take place in a hospital or at a doctor's office and how many days a patient should spend
in the hospital.   But now, according to the survey, insurers are evaluating whether the operation is appropriate at all -- whether in an outpatient or inpatient setting.  For example, about 40 percent of employees in conventional plans and 50 percent in preferred providers organization plans (PPO) are subject to outpatient precertification programs.  In-patient preadmission reviews now cover 81 percent of employees in conventional plans, up from 68 percent in 1988.
    "Medical review is not new.  Utilization management is more commonly used now to review the appropriateness of a wider scope of health care services," said Peat Marwick's James Buckley, national director of group insurance.  "While the emphasis is on cost savings, utilization management also protects employees by reviewing the quality of their medical care.  It helps assure that a patient receives appropriate treatment.  The study found that cost control and customer satisfaction are not tradeoffs."
    The following are highlights of Peat Marwick's survey of human resource directors at more than 1,000 private and public companies on their health benefit plans.
    -- Utilization management is more prevalent in conventional plans than in PPO plans.  In-patient preadmission reviews now covers 81 percent of employees in conventional plans, up from 68 percent in 1988.  High-cost case management grew more rapidly than preadmission certification in both conventional and PPO plans and now covers 80 percent of conventional and 90 percent of PPO enrollees.
    -- The study noted that roughly 2 percent of Americans account for almost 40 percent of health care expenses, making high cost case management's growing popularity easy to understand.  The survey found that through utilization review techniques, many employers seek to monitor and control a medical event.
    -- Forty-six percent of employees in PPO plans and 25 percent of employees in conventional plans bear a financial penalty for inappropriate use of an emergency room.
    -- Midsized companies are slightly less inclined to cover their employees with utilization programs than are large companies.  However, midsized companies are more likely to use an independent utilization management company than are large companies.
    -- Commonly, outside organizations are hired by plan carriers to administer preadmission certification.  About three-quarters of the employees in conventional and 66 percent of employees in PPO plans are subject to preadmission certification.
    For further information about the study,, or to receive a copy of the executive summary, write to Jon Gabel, KPMG Peat Marwick, 2001 M Street, N.W., Washington, D.C. 20036-3310.
    KPMG Peat Marwick provides accounting, auditing, tax, and management consulting services to leading business, governmental, private institutions and individuals through 135 offices in the United States. It is the U.S. practice of KPMG, which has operations in more than 120 countries and posted 1990 revenues of $5.4 billion.
    -0-        11/25/91
    /CONTACT:  Lisa Meyer of KPMG Peat Marwick, 201-307-7763/ CO: ST: IN:  HEA SU:  ECO FC-TS -- NY021 -- 6746 11/25/91 10:19 EST
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Publication:PR Newswire
Date:Nov 25, 1991
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