Skip Navigation U.S. Department of Health and Human Services
Agency for Healthcare Research Quality
Archive print banner

Managed Care

This information is for reference purposes only. It was current when produced and may now be outdated. Archive material is no longer maintained, and some links may not work. Persons with disabilities having difficulty accessing this information should contact us at: Let us know the nature of the problem, the Web address of what you want, and your contact information.

Please go to for current information.

Direct access to specialists may not raise managed care plans' costs

Allowing managed care patients direct access to medical specialists may not necessarily increase physician costs for health plans, according to a recent study. The study of physician use by enrollees of an open-panel, point-of-service health maintenance organization (HMO) and enrollees of a closed-panel gatekeeper HMO found no evidence of higher expenditures for specialists or for physician services overall in the point-of-service (POS) plan. Furthermore, only 3 percent of the POS plan enrollees used the services of specialists without first obtaining a referral from their primary care doctor. In fact, self-referred patients accounted for less than one-tenth of the money spent by the POS plan for medical specialist services.

The study was supported by the Agency for Healthcare Research and Quality (HS09414) and led by José; J. Escarce, M.D., Ph.D., of the RAND Health Program. Dr. Escarce and colleagues examined physician claims between 1994 and 1995 for the visits of approximately 50,000 privately insured, working-age members enrolled in the two HMOs operated by the same Midwestern managed care organization. Physician visit copayments ranged from $0 to $15, depending on the contract the plan members' employers had with the managed care organization.

Members of the gatekeeper HMO had to obtain both their routine health care and referrals to medical specialists through a primary care physician they selected from among 1,152 generalists in a physician network shared by both plans. The POS plan's members also had to select a primary care physician from the network and were encouraged to use that doctor for their routine care and for obtaining referrals. But the POS plan also provided generous coverage for self-referrals to the 1,692 medical specialists in the shared physician network. All the physicians in the network were independent contractors.

When the researchers examined claims for patients with no copayment requirement for either primary care physician visits or PCP-referred visits to specialists, they found that the overall cost of physician services was 4 percent higher in the gatekeeper HMO than in the POS plan. But when copayments were $10, overall physician expenditures varied from being roughly equal for both plans to being 7 percent higher in the gatekeeper HMO, depending on the amount of the copayments the self-referred POS-plan patients had to make when visiting specialists.

According to Dr. Escarce, the study provides an initial look at how point-of-service HMOs—which are increasing throughout the United States—affect patient demand for primary and specialty medical care. The study was funded as part of an AHRQ program to examine the impact of managed care plans' specialist referral policies on patient health, access to services, and costs.

For more information, see "Expenditures for physician services under alternative models of managed care," by Kanika Kapur, Geoffrey Joyce, Krista A. Van Vorst, and Dr. Escarce in the June 2000 Medical Care Research and Review 57, pp. 161-181.

Return to Contents
Proceed to Next Article

The information on this page is archived and provided for reference purposes only.


AHRQ Advancing Excellence in Health Care