The impact of utilization review on costs and utilization

This paper examines the performance of a utilization review program using data from Aetna's utilization review (UR) customers compared to a representative sample of its customers which had no utilization review during the study period. Statistical adjustments were made for the utilization management status, employee demographics, plan benefits, group size, year effects and seasonality. The study period covered from the first quarter of 1987 through the last quarter of 1988. The data suggest that UR reduces overall medical expenses by 4.4 percent, and inpatient expenses by 8.1 percent after a year of experience, largely by reducing length of stay.