Direct Access to Specialists May Not Raise Managed Care Plans' Costs

Research Alert: June 1, 2000

Allowing managed care patients direct access to medical specialists may not necessarily increase physician costs for health plans, according to a new study sponsored by the U.S. Agency for Healthcare Research and Quality (AHRQ). The study of physician use by enrollees of an open-panel, point-of-service health maintenance organization (HMO) and of a closed-panel gatekeeper HMO found no evidence of higher expenditures for specialists or for physician services overall in the point-of-service (POS) plan. Furthermore, only 3 percent of the POS plan enrollees used the services of specialists without first obtaining a referral from their primary care doctor. In fact, self-referred patients accounted for less than one-tenth of the money spent by the POS plan for medical specialist services.

The researchers examined physician claims between 1994 and 1995 for the visits of approximately 50,000 privately insured, working-age patients enrolled in the two HMOs, which are operated by the same Midwestern managed care organization. Physician visit co-payments ranged from zero to $15, depending on the contract the plan members' employers had with the managed care organization.

Members of the gatekeeper HMO had to obtain both their routine health care and referrals to medical specialists through a primary care physician they selected from among 1,152 generalists in a physician network shared by both plans. The POS plan's members also had to select a primary care physician from the network and were encouraged to use that doctor for their routine care and for obtaining referrals. But the POS plan also provided generous coverage for self-referrals to the 1,692 medical specialists in the shared physician network. All the physicians in the network were independent contractors.

When the researchers examined claims for patients with no co-payment requirement for either primary care physician visits or PCP-referred visits to specialists, they found that the overall cost of physician services was 4 percent higher in gatekeeper HMO than in the POS plan. But when co-payments were $10, overall physician expenditures varied from being roughly equal for both plans to being 7 percent higher in the gatekeeper HMO, depending on the amounts of the co-payments the POS plan self-referred patients had to make when visiting specialists.

According to José J. Escarce, M.D., Ph.D., who led the RAND research team, the study provides an initial look at how point-of-service HMOs—which are increasing throughout the United States—affect patient demand for primary and specialty medical care. The study was funded as part of an AHRQ program to examine the impact of managed care plans' specialist referral policies on patient health, access to services and costs.

Details are in "Expenditures for Physician Services under Alternative Models of Managed Care," published in the June 2000 issue of the journal, Medical Care Research and Review.

Note to Editors: For interviews of Dr. Escarce, contact Jess Cook, director of RAND's public affairs office, at (310) 4501-6913.

For additional information, contact AHRQ Public Affairs, (301) 427-1364: Bob Isquith (301) 427-1539 (BIsquith@ahrq.gov).

Internet Citation:

Direct Access to Specialists May Not Raise Managed Care Plans' Costs. Research Alert, June 1, 2000. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/news/press/pr2000/escarcpr.htm