The rising volume of tests, imaging and procedures are among the main culprits for rapidly increasing healthcare costs in the United States. However, a recent study in The Archives of Internal Medicine sheds light on the underlying issue: a rising number of referrals to specialists.

Our research on integrated health systems, which incorporates both an insurance entity and a medical provider entity, has shown their structure reduces such excess care and referrals without compromising quality. The examples below provide insight into how similar programs can be cultivated elsewhere, paving the way for a sustainable health system that provides affordable and high-quality care.

Study Of Referral Rates From 1999-2009

In the Archives study, “Trends in Physician Referrals in the United States, 1999-2009,” the authors Michael L. Barnett, MD, Zirui Song, BA, and Bruce E. Landon, MD, MBA, analyzed nearly 850,000 patient visits in a nationally representative data set. They calculated the probability that a visit to a physician resulted in a referral and found a stunning 94 percent increase over the 10 year period. Referral rates went from 4.8 percent to 9.3 percent, a near doubling that has astronomical cost consequences.

While it’s difficult to determine what percentage of these referrals were inappropriate, Barnett said in an interview, “An increase of nearly 100 percent cannot all reflect medical necessity over a 10 year period.” He also mentioned the study should signal that we are operating in a “broken system that doesn’t create any incentives for patients to see fewer doctors or have less fragmented care.”

Referral Rates In Select Integrated Health Systems

At Innosight Institute, we recently completed a yearlong study on integrated health systems that was funded by a grant from the Robert Wood Johnson Foundation’s Pioneer Portfolio. These systems are designed to lower fragmentation of care and avoid excess care, all while reporting high-quality results. Though the systems we studied implemented different programs, they all shared the underlying goal of closely coordinating care and maximizing what can be done in a visit to a primary care physician without need for a referral.

At Group Health in Washington State and Presbyterian Health System in New Mexico, physicians often utilize “curbside” consults, whereby specialists make themselves available to talk with PCPs so that they feel more confident to handle many medical situations in their own interaction with the patient. This is one of the ways that Group Health achieved a dramatically lower rate of cardiology referrals, which is at 214 versus a national benchmark of 1,059 cardiology visits per 1000 patients over 65.

Grand Valley Health System adds additional resources to the PCP setting, such as mental/behaviorally trained coaches or physician assistants to aid physicians who were uncomfortable with mental health issues or pressed for time. With this new approach, the Grand Valley Health Plan referral rate to mental health specialists decreased from 18.7 down to 6.5 percent, while becoming the leader in Michigan on all six HEDIS quality statistics for mental health.

HealthPartners in Minnesota doesn’t focus on the metric of referral rates, but instead scrutinizes how to get the most out of each specialty visit. Medical leadership works with specialists to ensure consistent medical practice for patients that are co-managed. For example, if endocrinology is seeing a patient with diabetes, they will also assess/address blood pressure and cholesterol. In fact, they look to increase the use of specialty visits when it could save costs. For example, a specialist may design a care plan that assists primary care in the management of the patient, resulting in lower costs of lab tests, imaging, etc. over the long-term.

A Sustainable Path Forward

It’s worth noting that the fine print of the Archives study said the only two subgroups that showed lower rates of growth in referrals were those physicians who saw a majority of their income come from managed care contracts, and those physicians who had ownership stake in their practices. This makes sense, as these conditions mirror those within integrated health systems.

Whether our country’s healthcare system moves all the way to integration or embraces some other form of incentives realignment, cost savings can only be achieved if primary care physicians are able to solve more problems in their own office visits.