The impact of Blue Cross and Blue Shield Plan utilization management programs, 1980-1988

This study evaluates the aggregate and temporal impact seven Blue Cross and Blue Shield Plan utilization management (UM) programs have on hospital utilization and payments over a nine-year period, 1980 through 1988. The impact of these programs is determined using a statistical model that controls for variations in organizational characteristics of 56 Blue Cross and Blue Shield Plans, the health care market of the individual Plan, and several state and federal health care regulations. The statistical results indicate that over the entire period 1980 to 1988, preadmission certification, concurrent review, and denial of payment (as a part of the retrospective review program) programs were associated with lower hospital admissions, and fewer inpatient days and payments per 1,000 members. Mandatory second surgical opinion did not have a statistical impact on hospital utilization and payments. The aggregate reduction in hospital payments for all Blue Cross and Blue Shield Plans with both a preadmission certification and concurrent review program was estimated at $2.55 billion in 1988 dollars. For those Plans conducting preadmission certification, concurrent review, denial of payment, and case management programs in 1988, the total per enrollee reduction of inpatient payments was $52.94.