Physician Referrals to Specialists Becoming More Automated

In the past, referrals to otolaryngologists from primary care physicians (PCP) were made on a person-to-person basis. Patients were referred to specialists not only due to their reputation for good patient care and communication but also because of how well the PCP and specialist got along and how well they knew each other.

That has changed, and will continue to, as the ongoing transformation in healthcare plays out. As healthcare insurers continue to narrow their networks, hospitals take ownership of private practices, and accountable care organizations (ACO) emerge, referrals are becoming less personal and more randomly assigned.

“This process has changed from the time when our physicians ran into a PCP on hospital rounds,” said Kevin Watson, practice administrator at Colorado ENT and Allergy in Colorado Springs. “It is more difficult to get face time with community physicians; therefore, practices are turning to administrators and marketing representatives to communicate with referring physician offices.”

This shift has been exacerbated by the removal of traditional channels of communication. Medical conferences and events where physicians of different specialties get together and mingle have moved online, making it harder for referring physicians to know about the latest procedures and treatments in a specialty. Referrals may be missed because the PCP doesn’t know an intervention is available.

Meanwhile, the number of specialists and subspecialists has increased dramatically. This dilutes the number of patients available to an otolaryngologist, as new categories of physicians siphon off patients who would have gone to an otolaryngologist in the past. It also makes it harder for PCPs to decide which doctor is best suited to a particular patient, and for the specialist to be recognized by the generalist.

Likewise, an increase in healthcare options available to patients further complicates referral patterns. Patients can get medical attention at an urgent care center, a grocery store, or their local pharmacy. Many are going online to self-diagnose, bypassing primary care entirely. All of this makes it harder for a physician to come to the attention of the person making the referral, especially when patients refer themselves. This has served to move the relationship to a less personal level, making it more difficult to establish trust.

“We believe that relationships are still very important,” said Danielle DeMaio-DeAngelis, MHA, COPM, department administrator for otolaryngology-head and neck surgery at Jefferson University in Philadelphia. “Trust in the provider you are sending your patient to is still very important to the practitioners, but there are now other things playing increasingly important parts in decision-making.”

Rise of Hospital-Owned Practices

Another major disruptor has been the increase in hospitals buying private practices. According to a recent AMA white paper, 32.8% of practices are partially or wholly owned by hospitals, up from 29.0% reported in 2012 (AMA. July 2015).

The early rounds of consolidation were largely hospitals and healthcare systems buying community-based primary care practices. More recently, hospitals have been looking at acquiring specialty practices, and otolaryngology practices, which have a high number of ambulatory surgery patients, are a good fit.

“What happens is that the hospital essentially becomes a large multispecialty practice that keeps referral within the system,” said David N. Gans, MSHA, senior fellow for industry affairs at the Medical Group Management Association (MGMA) in Englewood, Colo. “To the extent that all players adopt the same electronic medical record (EMR), billing, and communication systems, it can have an impact on those doctors who are not a part of the organization.”

When the hospital becomes a competitor, an independent practice’s defenses depend a lot on the specifics of its community and the number of patients involved. How many independent PCPs are left in the community? How can the non-hospital-owned practice cultivate relationships with those PCPs, instead of relying on the relationships established with PCPs at the hospital-acquired practice? These are major questions private practice physicians must answer for themselves.

Many independent primary care practices may be hesitant to send their patients to a hospital-affiliated otolaryngology group, for fear they won’t come back. Turning to the non-hospital-affiliated specialist would alleviate this concern. “In some communities this poses a major threat to the viability of a practice,” said Gans. “If patient referrals are not available to an otolaryngology practice, they will have a big problem.”

Advent of Narrow Networks

The cultivation of narrow networks by insurance companies is another concern otolaryngology practices face. In this situation, the insurer contracts with only a few physicians at all levels to see its patients. If one of your PCPs is not included, or if you aren’t in a network with your sources, you will most likely lose their referrals.

“We have already had a couple of doctors stop sending us their patients because they are a part of a narrow network and we aren’t a low-cost provider,” said DeMaio-DeAngelis. “They wanted to make sure they got their incentive at the end of the year, and I’m not changing that. Other than showing you provide the best care, I am not sure how, or if, you can change the financial incentives in narrow networks.”

When the practice looks at network offers, there are a number of alternatives to consider. Some take pretty much any contract they are offered that meets their requirement for payment. Others are more selective, limiting the number of networks they join, with the intent of concentrating their business with those who pay more quickly and have fewer rejected claims and an acceptable payment level.

Practices need to base these decisions on the needs of their specific area. If there are more otolaryngology practices, a practice may have less bargaining power than if there are only one or two. The same goes for the insurance market, where your options may be limited if there is one large employer controlling healthcare dollars through its health plan.

Mergers, ACOs as Options

Depending on the financial balance of power in a given area, another response for smaller practices may be to merge with others or be bought out by a hospital or multispecialty group. “If you can become the dominant practice in a market, and one that patients overwhelmingly want to go to, you certainly will have more negotiating power,” said Watson.

ACOs can also impact your ability to win referrals. This model groups together physicians across specialties that share financial and medical responsibilities. It is hoped that coordination of care will lower costs and maintain a high quality of care. As in narrow networks, patients are largely referred to group-affiliated physicians.

“Otolaryngology is not a big slice of the healthcare pie, so there isn’t a significant financial incentive to invite our specialty to join,” said Watson. “We belong to an integrated network similar to an ACO, but we are just the ENT group they work with. There are no requirements for us to meet, and we aren’t tied to any of the ACO’s contracts.”

Yet, the impact on otolaryngology practices is not yet well established. “Perhaps the biggest problem we are facing is that none of these models have coalesced yet, and even those that are organized don’t have a lot of history,” said Watson. “This means we don’t have a very good handle on most of the implications of these changes.”

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Kurt Ullman is a freelance medical writer based in Indiana.