Utilization management: a literature review for Canadian health care administrators

Utilization management (UM), the attempt to measure, understand and reduce inappropriate hospital use, has been in development for over 20 years. It is an outgrowth of two related phenomena: (1) the increasing responsibility of large institutional third party payers for health care costs and the increasing demand of those payers for accountability; and (2) in Canada, particularly, the debate surrounding the adequacy of hospital funding and the perceived inadequacy of cost control using global budgeting. Given the interest in UM, hospital administrators, provincial and federal associations representing hospitals, hospital employees and physicians would find a review of UM programs useful in terms of what is known about their effectiveness, and the specific initiatives in Canada. The authors underscore the critical need for formal evaluation of UM programs; to date there has been little systematic research into issues related to its implementation and impact. This issue is particularly pertinent because UM programs have not been widely implemented in Canada.