Utilization management in a mixed-payment environment

Fee-for-service and capitation payment methods create different financial incentives for healthcare providers, and the objectives of utilization management differ under each payment method. These differences can be reconciled, however, by incorporating the strengths of utilization management programs associated with both methods into an overarching program that focuses on the continuum of care. Such a program should be focused on achieving the optimal outcomes for patients by identifying the appropriate level of care, who should provide it, and when and where it should be provided. Essential to this effort is access to comprehensive clinical and financial data through an integrated information system. In addition, financial incentives need to be aligned through such means as risk pools, compensation arrangements tied to achievement of medical management goals, and clearly defined policies and procedures.