Referrals, Part 1

August 6, 2009
Jeff Brown, MD

HMOs were conceived in the 1970s to slow the rising costs of healthcare, and despite the many unintended consequences associated with them, eventually succeeded. One thing they didn't resolve, however, was the means and methods of physician referrals, a web that no healthcare debate has thus far attempted to untangle.

Referrals are a huge part of healthcare economics and a direct need of the majority of America's docs to get their business. 25 years ago, Congress and the insurance companies acknowledged this vital function and, in a flawed effort to control costs, tried to manage the process in the ill-conceived HMO movement. "Gatekeepers," whether referring primary care docs or insurance company functionaries, would rein in the cost of healthcare by recasting and restraining open access to higher-priced specialists. And, presumably, patient care would improve or at least be maintained.

The rising cost of healthcare was temporarily slowed, however, due to a misunderstanding of the relationships involved in the process and poor planning, huge new problems were created. This was a classic example of the Law of Unintended Consequences. Delays, telephone and paper logjams, poor training, and a lack of "buy-in" by the medical community brought chaos and put an unanticipated monkey wrench into many areas of medicine. Some targeted specialties such as dermatology were temporarily stymied, leading to the wry question in our area: "What do you call a dermatologist in California?" Answer: "Waiter!"

That situation has ameliorated with time and afterthought, but many dermatologists, for example, have gone entirely into cosmetics, as a result. Cash up front, no forms, no receivables, no hassles; who wouldn't? The Market has Spoken.

But the issues involved in the means and methods of physician referrals remain unresolved and I, for one, have seen no mention of a better approach in the position papers flying about from Washington to improve healthcare. And docs have a major financial stake in these potential changes, in addition to the welfare of our patients, lest we and the politicos forget.

So first, let's look at the traditional model. The actual practices revolving around referrals have always been one of the inadequately studied, unrationalized areas in medicine that is seldom discussed between docs, but is very important.

There are what, 21 specialties now and counting? And over the last generation the pertinent science and practice has become so complex that everyone involved freely admits how difficult it is to keep up. More than ever, we need to have a better connection among the docs practicing different specialties. A number of the vertically-oriented, disease, organ, or function-focused folks particularly have said to me, "I don't know how you primary guys do it, I can't even keep up with my own specialty."

But that's a tale for another time.

I do not recall at any point in my training having any formal instruction or discussion of this vital relationship between docs. Just "Get a lung/kidney/bone/etc. doc to see this patient." Multispecialty groups have dealt with the referral issue by having a limited choice internally of whom to refer to and often a local protocol has been established for doing so, although these are not necessarily standardized through a best practices approach. But at least you get to know the relatively small group of specialists that you must deal with, you have some input on the criteria for the referral, and the potential conflicts of interest are minimized (that is, other than the inherent conflict in HMOs making money from limiting care and fee-for-service groups making money for doing more activity, but that's another ethical quagmire we'll table for now).

Secondly, let’s talk about the theoretical difference between a consultation and a referral. A consultation is a request for an informed opinion from a knowledgeable specialist on a subject that is presumably better understood than the originating doc. The opinion is about the patient, who pays for it, but it is directed to the doctor who asked for an opinion on diagnosis and/or treatment and who is presumably responsible for any further action, if any, on that informed opinion.

A referral, on the other hand, is the transfer of primary responsibility for that patient and/or that patient's pertinent problem to a new physician, whatever the specialty, for on-going care. I know that these distinctions get blurred, but you have to have some frame of reference to get your head around the issue.

A doc sending a patient to another doc is saying, implicitly or, preferably, explicitly, “Better information than I have is available and it is in the patient's best interest to get it applied.” Or, he/she might be saying, “Our relationship is not good and we will both be happier if you relocate.” Or there could be a local Standard of Practice that requires a certain kind of doc to see a certain kind of medical problem, so you do it to CYA. Or there could be financial/coverage issues and on and on. I'm sure that you could add more reasons for a referral.

The gatekeeper/coverage hassles are an active disincentive for referral, so a referring doc does need to be motivated to jump through the hoops when required. Next time, we'll talk about how that happens and how it might function better.