Objectives. The use of utilization management as a cost-containment strategy has led to debate and controversy within the field of mental health. Little is currently known about how this cost-containment approach affects patient care or quality. The aim of this investigation was to determine whether treatment restrictions imposed on privately insured psychiatric patients by a utilization management program affected the likelihood of readmission.
Methods. The utilization management program included three review activities: preadmission certification, concurrent review, and case management. During a 5-year period (1989-1993), 3,073 inpatient reviews were performed on 2,443 privately insured psychiatric patients. Using logistic regression, restrictions imposed by utilization management on length-of-stay in relation to 60-day readmission rates were investigated.
Results. The most common diagnoses among the psychiatric patients whose care was reviewed were alcohol dependence (22.9%), recurrent depression (22.5%), and single-event depression (20.8%). On average, 22.4 days of inpatient psychiatric treatment was requested through the review procedures, and 15.5 days of care were approved by the utilization management program. Of the 2,443 patients reviewed, 7.9% had a readmission within 60 days of their initial admission. Patients whose length-of-stay was restricted by utilization management were more likely to be readmitted. For each day that the requested length-of-stay was reduced, the adjusted odds of readmission within 60 days increased by 3.1% (P = 0.004).
Conclusions. The utilization management program restricted access to inpatient psychiatric care by limiting length of stay. Although this approach may promote cost containment, it also appears to increase the risk of early readmission. Continuing attention should be paid to investigating the effects on quality of utilization management programs aimed at containing mental health costs.