The impact of managed care and practice size on primary care physicians' perceived ability to refer

Objectives: To identify the determinants of primary care physicians' perceived ability to refer patients, to compare perceived ability to refer between solo/two-physician practices and group practices, and to determine the impact of managed care on perceived ability to refer. Methods: Multivariate analysis using a dataset derived from the Community Tracking Study Physician Survey, 1996-1997. The variables used to explain physicians' perceived ability to refer included physician and practice characteristics as well as aspects of the financial arrangements of managed care. The sample was stratified by practice size. A likelihood ratio test was performed to determine whether there were differences in practice characteristics and managed care financial arrangements that could explain variations in perceived ability to refer between physicians in solo/two-physician and group practices. Results: Perceived ability to refer did not vary much between physicians in solo/two-physician practices and those in group practices. However, the determinants of perceived ability to refer did vary by practice size. The effects of physicians' characteristics were more pronounced among physicians in group practice, whereas the effects of financial arrangements were significant for physicians in solo/two-physician practices. The most significant determinant of perceived ability to refer was primary care physicians' satisfaction in their communication with specialists. Conclusion: Group practices are more immune than solo/two-physician practices to external financial arrangements from managed care contracts, possibly through their ability to take advantage of economies of scale and to diversify their sources of funds.