Next-Gen Utilization Management: Addressing Clinical Variation


Understanding clinical variation is key to identifying inappropriate care; addressing inappropriate care is key to reducing costs and improving quality.

Jim Fields and Bruce Hamory, MD

8 min read

The Blues have long been at the forefront of the shift to value. Today, Blue plans have about 450 value-based programs in market or in development, according to the Blue Cross Blue Shield Association. As plan executives come together this week for the annual Blue Cross Blue Shield National Summit—gathering amidst the uncertainty of health reform—capitalizing on the opportunities of value-based care will be foremost on their minds.

Central to any value-based strategy is improving physician performance and efficiency. With an estimated $200 billion spent each year on unnecessary care, eliminating even a small percentage of inappropriate care would have a significant impact on health plan costs, not to mention quality and patient well-being.

Plans rely in large part on utilization management (UM) to manage unnecessary care. But UM has limited scope, and in many cases is not accessible at the point of care. For example, most plans have UM practices to ensure physicians don’t order an MRI when there is no indication for it. Harder to manage are decisions that depend on clinical judgment.

Should a physician performing a screening colonoscopy take a biopsy in every case? (Or is that aggressive approach truly necessary?)

Should a cardiologist do a screening angiography when they don’t have the ability to place a stent? (Forcing some patients to undergo a second invasive procedure, with all the accompanying risks and costs.)

How often do peers treating the same types of patients make the same clinical decision? (Always? Never?)

Clinicians have hundreds of benchmarks and quality measures to guide their decision process. But most of these measures focus on medical practices where there is a clear right or wrong approach; or they apply to a facility or a department where the performance analysis is less actionable at an individual physician level. 

In other words, there is little guidance on the appropriateness of clinical decisions, and almost no way for physicians—or plans—to evaluate clinical judgment at an individual level. In this time of narrow margins, insight into the appropriateness of care, at a physician-by-physician level, is critical to plans’ quality and value-based efforts.

Measuring appropriateness

Providers rely on best-practice guidance, quality measures, and their own experience to make decisions on a case-by-case basis. That in-the-moment clinical judgment is vital to the delivery of high-quality healthcare. Second guessing the clinical judgment of a physician in a specific situation is almost always a no-win argument, and typically creates resentment from the physician and patient, regardless of how evidence-grounded the push-back.

But when a provider’s clinical judgment consistently deviates from best practice standards and the practice habits of peers, it becomes a quality, cost, and safety issue. And the appropriateness of that clinical judgment should be evaluated.

A new research article in JAMA Dermatology shows how the appropriateness of clinical judgment can be measured and evaluated. The article was authored by Dr. Marty Makary of Johns Hopkins Medicine, along with leaders of the American College of Mohs Surgery, a medical association of skin cancer and reconstructive surgeons, and it highlights the practice variation in skin cancer surgeries.

Working with the College and leading skin cancer surgeons, Dr. Makary established an appropriateness measure for Mohs micrographic surgery (MMS), a skin cancer surgery. The measure focused on the number of tissue blocks a dermatologist removes when taking out a skin cancer. One important point of context: surgeons are paid per tissue block removed.

The College endorsed the metric and then analyzed Medicare claims data to determine the national average and how much variation its member-physicians demonstrated when performing MMS. The analysis found that some dermatologists average 1.6 blocks per patient (the national average), but others average 3 or 4 blocks per patient.  More blocks equates to more time in surgery for the patient, more cuts (increased risk of infection), and increased cost for the procedure.

That some physicians routinely remove more than double the national average demonstrates the need to address unwarranted variation and potentially inappropriate care. 

New appropriateness tool

The research and process profiled in the JAMA article is the foundation for Practicing Wisely™ , a new collaboration between Oliver Wyman and Dr Makary. It aims to reduce unnecessary care, improve patient outcomes, and lower costs through the development and application of physician-developed measures of appropriateness.

Practicing Wisely measures practice variation in like-physician cohorts (those in the same specialty and sub-specialty, doing the same types of procedures) and identifies extreme outlier physicians—that is, doctors who consistently deviate from physician-endorsed guidelines and the practice patterns of their peers. From that one measure of appropriateness in Mohs surgery, the team has a rapidly growing pipeline of over 100 measures.

Practicing Wisely does not question providers’ clinical judgment in any specific case. Instead, it assesses the practice patterns of physicians at a level not previously possible, and it empowers plans to collaborate with physicians to bring their practice patterns in line with the patterns of their peers.

Several organizations have tried the analytic approach of comparing physicians to their peers and instituting programs to curb those outliers. This approach can be used as a blunt instrument to curb cost—cutting providers from the network or instituting a prior authorization program. But as plans continue down the path of value-based care, they will quickly exhaust blunt-instrument savings options and will need to develop processes to shape the behavior of physicians to improve the cost effective delivery of care. This will require measures of clinical appropriateness, developed by physicians, grounded in medical literature, and rooted in the practice patterns of their peers. 

Yes, behavior change is hard.  But having the insights to show a physician how they perform on measures of appropriateness is a constructive foundation from which to start.