Managed Care and Physician Referral

Abstract

In the era of managed care, fundamental changes are occurring in the American health care system that are altering physician referral patterns. Faced with higher premiums that erode profits and competitiveness, employers, government, and nonprofit agencies are contracting with managed care organizations, which control costs partly by imposing constraints and incentives on physician referral behavior. As more and more Americans are covered by managed care plans, it becomes more important to understand how managed care organizations control access to specialists and how these controls affect health outcomes. The authors present a model defining the expected influence of managed care on physician referral based on social exchange theory and the empirical literature. They conclude with a discussion of the future research implications of the model.