5. Do you know your numbers?
Paying attention to industry benchmarks regarding admission and related practices is critical to identifying areas for improvement or staff education in the utilization management department. Examples of essential metrics in this area include length of stay, reimbursement, denials, observation-to-inpatient ratio, admission trends by provider, and trends by cost center. Organizations should evaluate performance across multiple dimensions, including at the facility level and financial class or payor levels. Following are some questions to ask UM leaders about admission practice metrics:
- What percentage of bedded patients are being admitted? An average hospital admits approximately 84% of bedded patients, with most hospitals falling between a 75% and 90% admission rate.1 If a hospital’s admission rate falls below that range, it might mean it is not admitting patients who typically would qualify for inpatient care, resulting in potential missed net revenue. If the hospital’s rate falls above that range, the denial risk increases.
- What are the hospital’s initial and final denial rates (during the patient’s stay and post-discharge)? Knowing these numbers can help identify potential net revenue leakages and opportunities to understand payor behavior for managed care conversations.
Dig deeper for even more improvements
Digging deeper into the root of utilization management department challenges can help healthcare provider organizations begin to address them. Getting answers to some of the questions organizations can consider related to UM department performance can help them identify areas for improvement that can have cascading, positive effects on patients, staff, and the bottom line.
The patient care and financial risks of UM underperformance are great. For more ideas about optimizing this area, healthcare leaders should consider working with third-party specialists.