With innovations in care, clinical pathways provide a basis for proper comparison with current treatments. Clinical pathways are becoming widespread, not only because of quality issues but because of the profession's increasing awareness of the need for cost effective allocation of finite health resources. The Health Legislation Act also requires contracts between health funds and hospitals to be described on the basis of AN-DRGs. This will enable fund managers to undertake hospital variance analysis. They can then ask hospital managers to investigate cost variability of particular AN-DRGs.
Clinical pathways can provide reasons for variance and empower management to redress the system.
Hospital use and utilisation review of clinical pathways will be increasingly relevant in the negotiations for Hospital Purchaser-Provider Agreements, which a health benefit organisation may choose to enter into with a hospital for the provision of services to its members. The financial viability of private hospitals is dependent on these agreements. The aim is to ensure that resultant allocations are cost-effective and equitable. Utilisation review can be used to develop clinical pathways, assess resource allocation, or assess compliance with a stated clinical pathway. In managed care in the United States, utilisation review addressed overservicing and cost-cutting.