what is utilization management in healthcare

Utilization management is a process that evaluates the efficiency, appropriateness, and medical necessity of the treatments, services, procedures, and medications provided to patients. It is a critical component of healthcare operations, as it helps to ensure that patients receive high-quality and appropriate care while controlling costs and reducing waste. The typical utilization management process flow involves evaluating the necessity of medical treatments and services on a case-to-case basis. The goal of utilization management is to analyze the effectiveness of treatments for each patient before, during, and after care delivery. Utilization management also helps to identify patterns in healthcare service use and determine whether those services align with best practices or clinical guidelines. Implementing utilization management strategies helps to improve the efficiency and quality of care delivery while reducing costs and improving the overall health of the population. However, implementing a utilization management program can be challenging and time-consuming, requiring an overhaul of hospital procedures and policies. Utilization management also needs approval from several state and federal agencies.