REFERRAL CONTROL AN EVOLVING PROCESSPosted On: Aug. 16, 1998 12:00 AM CST
To the editor: Michael Bradford's Aug. 3 article, "Is the Gatekeeper Necessary?" is both a timely and important subject for readers to explore. I would point out, however, that the gatekeeper model need not be an all-or-nothing proposition, which this headline seems to suggest. In fact, most plans today allow degrees of self-referral to specialties and diagnostic services.
A better headline would have been, "What Degree of Referral Control is Best Practice?" It is unfortunate that this function is labeled with the term "gatekeeper," with its obvious restrictive connotations. The beauty of our competitive health system today is that many experimental models for managing specialty and diagnostic services are in play.
Ultimately, referrals need to be managed by some mechanism, whether it is via the provider assigned to manage referrals or financial provider capitation strategies. Such strategies may include placing incentives on lower utilization in a subtle way or partial fee-withhold systems that distribute dollars at year-end to the providers that most effectively manage patient utilization of services.
Any health plan claiming it has no mechanism in place to manage or control certain specialty procedures and diagnostic services is not giving it to you straight, or it is not by definition a managed care organization. With the exception of certain PPOs that fall less into the category of managed care organizations than they do simple discount networks, programs offering claims of open access to specialty providers still maintain a fee withhold or capitation arrangement behind the marketing facade. Today's buyer must accept the fact that all managed care requires some form of referral control, with only look and feel varying from plan to plan and location to location.
Another point not expressed in the article was the concept of combining tight referral control programs with open access as a wraparound point-of-service option. This combination product is used by most of our clients, major purchasers of health care such as General Electric Co., Kellogg Co., Eastman Kodak Co. and PepsiCo. They often elect this product because it uses the gatekeeper model as the base plan with the option to roam, referral-free, as the point-of-service option. Of course, there are deductible and coinsurance requirements when out of network, but the flexibility allows for the needs of all patients to be met.
The patient who is comfortable with a primary caregiver and not troubled by the prior-approval requirement for certain specialty and diagnostic needs, often chooses to stay within the network at all times. Indeed, we have frequently found that once a patient establishes a relationship with a primary caregiver, out-of-network usage becomes the exception.
As the managed care industry continues to evolve, so does the gatekeeper function. More sophisticated, blended referral control models have risen from earlier rudimentary efforts. We must recognize and support these innovations. Organizations operating without referral controls of any kind mark a simple return to the fee-for-service reimbursement systems of the past. As such, they no longer operate under the heading of managed care.
Chief Executive Officer
Network Management Services