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Creating and Implementing a Nurse Utilization Management Program


Managed care includes a system aimed at assessment of the costs spent in the process of providing adequate health care services to veterans. The change in the organization should be introduced to overcome difficulties related to the adequate delivery of health care services to veterans instead of utilizing the public hospitals and reorganizing the system of providing health care in community hospitals. So, the VA hospitals can implement changes to ensure that veterans are treated appropriately in terms of quality of services provided, patients’ satisfaction about conditions and procedures, and costs spent on health care delivery taking into account the necessity of reducing costs with the help of utilization management methodologies.

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Theoretical Background

As reported by many reputable researchers, the concept of utilization management is not clearly defined which makes it difficult to anticipate certain outcomes and assess the results of the cost-containment approach. The main fiction of the utilization management team is to reduce costs in terms of health care services provided hence rearranging the basic areas for spending health care costs.

For instance, Long and Marshal (1999) report about the increased costs spent on decedents during the last days of their lives and argue about the possibility of reducing those costs. However, the hospice patients were contrasted to non-hospice one due to the difference in the costs spent on each patient including the cost for hospice patients “$4,667 compared with $8,723 for non-hospice patients” (Emanuel, 1996 as cited in Long & Marshal, 1999, p. 45).

Thus, cost containment should be introduced as a management change objective. So, the authors have conducted research and found out that the costs can be reduced for each patient if using the case management approach when every patient can get more qualified and adequate care instead of inappropriate health care provided for patients in the study by Scitovsky (1994 as cited in Long & Marshal, 1999, p. 52).

Another authoritative source argues about the necessity of using utilization management due to the ineffectiveness of risk-adjustment methods. Goldfield and Averill (2002) analyze the study by Welch and try to find an adequate decision on the problem of risk adjustment methodologies related to payment systems. So, the authors assess the situation and give some suggestions on the changes to be introduced into the payment system to avoid risks such as the connection between the risk group definition and the computed capitation payments. In this respect, the report includes a list of diagnoses to be taken into account while defining the risk groups and adjusting risk models to the real situations having a transparent system of “clinical logic of any risk adjustment mode” (Goldfield and Averill, 2002, p. 22).

Kerr et al. (1995) analyzed the preauthorization of certain procedures and pharmaceutical issues used by physicians and case management groups to assess the necessity of the use of different health care practices towards different patients and the connection of these results to the capitation and risk adjustment strategies used by the administration. So, it is possible to assume that some patients cannot afford bone scan or echocardiography to be done while the preauthorization of these procedures does not equal one hundred percent and can be considered the one done at request of a physician who knows better how to treat patients even though the patient’s capacity to pay for those procedures can be insufficient.

Cost-containment approaches are emphasized by Wickizer and Lessler (2002) who analyze the appropriateness of activities utilized by physicians to treat the patients contrasted to the consumption of health care resources. This study reviews the most important techniques implemented in the process of utilization management including gatekeeping, case management, and pre-admission. However, the article also focuses on the inequality of health care services provided to patients due to lack of outcomes and quality management combined with utilization management to ensure that the quality of the health care services is not contained.

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Effectiveness of Organizational Change

The organizational change is sure to affect the personnel that bears responsibilities for delivering health care services to patients, nurses (Cesta, 2006). As the change should be implemented and assessed, it is necessary to analyze the effectiveness of organizational change in terms of quality of services delivered by nurses and physicians, the satisfaction of patients, and costs spent on health care about the risk groups and capitation rates. In other words, managed care requires the entire process of health care delivery to be reorganized (Mayer, 2006) with regard to the organizational change and cost reduction strategies implemented to ensure that the veterans can be adequately treated in VA hospitals.

Outcome Measurement Strategies

Cost reduction

The cost reduction strategies are all parts of the utilization management; so, the health care providers and patients can experience the positive effects of cost containment practices and report about their satisfaction and results of those methods with the help of utilization management techniques such as those analyzed in the study by Wickizer and Lessler (2002). Spector (2010) suggests that benchmarks are established inside the health care organizations to enable the health care providers and patients to interact without mutual complaints about the quality of the health care services provided

Veterans at VA hospitals

Veterans at VA hospitals are sure to receive more adequate and better-structured health care due to the implementation of the organizational management change. As communication can be considered one of the primary sources of information to assess the effectiveness of changes introduced, patients and personnel can be surveyed respectively (Taylor, 2005). Besides, the roles of nurses can be re-identified to ensure that patients receive adequate health care within the organization about primary care and managed care (Huang et al., 2005).

Evaluation of Outcomes

Quality assessment

The quality of health care service provided can be assessed with the help of questionnaires using a list of questions with multiple answers to choose from or personal interviews that can be more effective though time-consuming. So, the variables can be taken into account regarding the condition of a patient immediately after the delivery of health care services and the period that the patient finds him-/herself at the VA hospital. In other words, the communication and the ways the survey is compound affects the effectiveness of findings and their further impact on changes. As reported by Borkowski (2010), the communication techniques mean a lot for the management of an organization (p. 71).

Measurement of costs spent

The expenditure of costs on health care delivery depends much on the type of assessment and the readiness of personnel and patients to provide reliable data.

Utilization review

The utilization review is designed to measure the effectiveness of inpatient and outpatient health care services provided to patients (Wickizer and Lessler, 2002, p. 235). As the need for hospitalization or performance of certain procedures can be ambiguous, the preauthorization or pre-admission is used to control the activity of physicians in terms of pharmaceuticals prescribed, procedures and other operations prescribed. The more each physician thinks about the appropriateness of deices and operations used to deliver the health care services, the more appropriate the services can appear.

Case management

Administrative case management and clinical case management are two broad categories that can be emphasized within the case management assessment technique. So, the administrative case management focuses more on activities aimed at delivery of health care services to patients about the overall performance of the hospital, costs spent in each case, and appropriateness of those operations and procedures. On the other hand, clinical case management measures the approaches taken in each and every individual case starting from trauma and ending with heart failures (Wickizer and Lessler, 2002, p. 236).

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Physician gatekeeping

This technique can be considered more restrictive than assessing because it is aimed at the limitation of patients from self-health-care management when they address individually different specialties and are often brought to multiple tests. So, the practical measurement of this technique proved it to be of little effectiveness when used alone.

Evaluation of satisfaction

The satisfaction of nurses is important as they are primary caregivers and should be provided with a healthy environment for work. However, the issue of primary concern is the satisfaction of patients as they are provided with health care services since the organizational change was implemented. So, the satisfaction of patients can be assessed with the help of surveys/questionnaires or intranet reports that are used to ensure that the flows of information are easily transmitted through the organization.

Summary of Past Works

The most important part of the work is that the technology should be used in all areas of human activity to facilitate the ways of communicating messages and flows of information within organizations. So, the health care sector should not be an exception in this issue introducing the organizational change and ensuring that the veterans are treated adequately with the help of technologically innovative methods of communication and reporting. In this respect, redesigning the roles assigned to nurses, it is possible to assess the satisfaction of patients using coaching techniques, a collaborative approach to enable nurses and patients to interact while providing/receiving health care, use of newsletters to provide free access to information to the health care providers.


As the reduction of costs can affect the quality of the health care services provided to patients, it is necessary to make sure that the patients can freely report about their satisfaction and other factors that may influence the quality of care provided. Besides, the activity of each nurse should be assessed in terms of the adequacy and appropriateness of operations and services provided. Though the assessment of quality can be rather difficult, the administration of the hospital can use the utilization management techniques to ensure that the costs are spent optimally in combination with newsletters and other information technology techniques to ensure that the patients respond to changes and their satisfaction level can be measured respectively.

Reference List

Borkowski, N. (2005). Organizational behavior in health care. Sudbury, MA: Jones and Bartlett Publishers.

Cesta, T. (2006). Survival strategies for nurses in managed care. New Jersey: Butterworth Heinemann.

Goldfield, N., & Averill, R. (2002). It’s management not payment that we should focus on: Comments on Welch. Journal of Ambulatory Care Management, 25(3), 16–22.

Huang, P., Yano, E., Lee, M., Chang, B., & Rubenstein, L. (2005). Variations in nurse practitioner use in Veterans’ Affairs primary care practices. Health Services Research, 39(4), 887–904. California: Health Research and Education Trust.

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Kerr, E. A., Mittman, B. S., Hays, R. D., Siu, A. L., Leake, B., & Brook, R. H. (1995). Managed care and capitation in California: How do physicians at financial risk control their own utilization? Annals of Internal Medicine, 123(7), 500-504.

Long, M. J., & Marshall, B. S. (1999). Case management and the cost of care in the last month of life: Evidence from one managed care setting. Health Care Management Review, 24(4), 45–53.

Mayer, T. (2006). Managing utilization successfully in 12 not so easy steps: managed care. New York: McGraw-Hill.

Spector, B. (2010). Implementing organizational change: Theory into practice. Upper Saddle River, NJ: Pearson Prentice Hall.

Taylor, S. (2005). Communication for business: a practical approach. New Jersey: Butterworth-Heinemann.

Wickizer, T. M., & Lessler, D. (2002). Utilization management: Issues, effects, and future prospects. Annual Reviews on Public Health, 23, 233-254.

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