Appropriateness versus efficiency: the economics of utilisation review

Abstract

The aim of routine utilisation review is to identify patients who are inappropriately placed in an acute unit and who could be alternatively treated in a lower technology facility. Utilisation review was designed as a means of cost control in the USA, but problems with rising emergency admissions and consequent acute bed shortages in the UK have led to a substantial and growing interest in the concept of appropriateness and in the development of utilisation review instruments. Appropriate care is not necessarily the same as efficient care, however, and inappropriate care could potentially be more cost-effective than the alternative. This will depend on, first, whether the design of utilisation review instruments is such that they will encourage efficiency, and second, whether efficiency objectives would be met by the application of utilisation review in the context of the UK health care system. The first issue is discussed in relation to the effectiveness of alternative forms of care. The second is discussed in relation to the potential for reductions in cost, the issue of institutional resistance in the UK, and the validity of utilisation review instruments. The paper concludes that the potential impact of utilisation review on technical efficiency in the UK is ambiguous and questions its purpose in the National Health Service.