PEDIATRICS Vol. 94 No. 4 October 1994, pp. 516
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EXPERTS SAY SCRUTINY ADDS TO HEALTH COSTS

J. F. L. MD

Saving Money, or Wasting It?

Second guessing doctors' decisions, formally known as utilization review, has become ubiquitous in American medicine. It is at the heart of "managed care" plans in which close oversight is given, but it is also common now even with traditional, unrestricted health plans.

Insurance companies say such scrutiny saves them as much as $10 for every $1 they spend to hire reviewers or to buy computer programs that help them evaluate care. But whether such reviews are saving society any money—or costing it dearly—is a subject of wide debate.

It is clearly not saving money for the Mayo Clinic, which now has 70 full-time employees talking to 2,400 different insurers

"Utilization review is a growth industry and a very expensive and inefficient one," said Dr. Arnold Relman, former editor of the New England Journal of Medicine. "There are companies that are growing by reviewing insurance claims for insurance companies, and other companies getting rich by helping hospitals fill out forms so they are reimbursed."