Health Care Provider Team Formation

By April 25, 2018 Commentary

The National Bureau of Economic Research often publishes papers on health care topics that you won’t find elsewhere.  A recent one looked at the formation of clinical care teams in health care, whether in the same institution or through referral networks, to ascertain impacts on productivity and efficiency.   (NBER Paper)   General research on teams has identified a number of barriers to optimal performance and some methods for overcoming those barriers.  For this paper the researchers were interested in whether health care teams, composed of members from different organizations, which worked together more frequently had lower costs for treating complex patients.  And on the other side, they wondered whether more concentrated referrals to specialists deprived patients of potentially better matches with a wider range of specialists’ skills, lowering quality, but they believed they had inadequate methods to answer that question.  Their data source was the Massachusetts all-payer data set.  Massachusetts is a state where insurers heavily require patients to have a primary care physician, who then makes referrals to other doctors.  The looked at referral patterns to determine the level of concentration of a particular primary care physician’s referrals; that is, what percent of total referrals went to how many and which doctors.  Five common specialties were used for the analysis.  The patient’s of interest were those with any one or more of several chronic diseases, where care coordination could be more important.  The patients were “assigned” to a PCP by a matching algorithm.

Referral concentration varied widely across PCPs, and even within a particular organized network of PCPs.  In an analysis which adjusted for patient health status and other factors, the authors found that for both a commercial and Medicare population, primary care physicians with a more concentrated set of referral relationships had a lower total cost of care, with about 6% less utilization and 12% less spending for the commercial population.  Due to data limitations, the Medicare findings were not as robust, but still showed a strong relationship between more concentrated referral patterns and lower spending.  One potential explanation for the results is that health plans increasingly have a more limited set of in-network referral options, so physicians may not be freely choosing who they refer to.  In addition, especially in Massachusetts, the physician community has become heavily concentrated and heavily employed by health systems, which also are limiting where doctors refer to.  These factors may by themselves encourage fewer and more concentrated referral relationships.  At the same time in Massachusetts, there is a very pervasive use of at-risk capitation to providers from health plans, which may encourage lower utilization.  So less spending with concentrated referrals may actually reflect factors other than better care coordination.

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