Managed Care Specialists Supply of Medical Services

Information on Referrals

Years ago, when someone needed care from a doctor they visited the physician directly whether they were a general practitioner or a specialist.  Nowadays, it is rarer for patients to visit a specialist without a referral.  The typical referral comes from a primary care physician, but it is also common for a specialist to refer the patient to another specialist (cross-referral).  Even when a patient sees a specialist without consulting another physician, this is now called a self-referral. 

Forrest and Reid (1997) use 1989 to 1995 data from the National Ambulatory Medical Care Survey to give more detail on the nature of referrals.  The authors compare the amount of referrals which occur inside and outside of managed care.  One might think that referrals are less common in managed care since these organizations are known to restrict the supply of specialist services; on the other hand, managed care organizations often require more referrals (fewer self-referrals are allowed) so it is possible that the number of referrals is higher in managed care as well. 

The authors found that primary care patient visits in the HMO setting were 66% more likely to lead to referrals than such visits under an indemnity plans.  Patients in HMOs were less likely to be able obtain self-referrals, however.  Thirty one percent of specialists’ managed care patients were self referred compared to 49.5% of their patients in indemnity plans.  Cross referrals between specialists occurred at similar rates in the managed care and fee for service settings. 

Economists have focused on primary care physicians’ financial incentives to refer patients to specialists.  Stephen Shortell (1973) claims that a social exchange model may more accurately reflect how referrals are performed today.  Mr. Shortell’s article in the Journal of Health and Social Behavior claims that non-financial incentives largely influence to which specialist a patient is referred.  Shortell hypothesizes that 1) a specialist’s status in the field, 2) their friendship level with the primary care physician, 3) their office’s distance from the primary care physician’s office, and 4) whether or not they are on the same network as the primary care physician likely influence the primary care physician’s decision-making process. 

 Forrest, Christopher; and Reid, Robert; (1997) “Passing the baton: HMOs’ Influence on Referrals to Specialty Care,” Health Affairs, vol 16(6), pp. 157-162.

Shortell, Stephen M.; (1973) “Patterns of Referral Among Internists in Private Practice: A Social Exchange Model,” Journal of Health and Social Behavior, vol 14(4), pp. 335-348.