Are you overpaying for medical care?

Medical care is a confusing concept. This makes it the center of discussion for politicians and economists. As we all know, these two parties only want to nurture and protect the stability of every patient. So what does it mean when specialized care facilities ask for a referral from a general doctor? More importantly, how does this affect a patient’s medical costs? It’s a mess to make patients jump through all these hoops to get themselves healthy. There is a theory that medical institutions steal people’s money, leaving patients frustrated and fearful. It is not wrong to be careful and to want to have complete control of your money. The medical industry is complex, making people cautious about spending money.

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The phrase ‘medical gatekeeping’ pops up more and more as we devolve into a society where medical care costs too much and does too little. This brings us to our first topic of discussion…

How is medical care distributed?

The conventional role of physicians and their gatekeeping measures is in everything they recommend, including their treatments, medications, and hospital visits. In a physician’s oath, they vow to make decisions that are beneficial, effective, and efficient for the patient. This implies that they use scarce medical resources optimally and do not hand out aggressive, expensive procedures for less intense ailments.


If a patient’s needs are beyond what a general doctor can prescribe, medical referrals come into use. Some may use referrals for hospital visits while others need a simple consultation with a specialist. 

How useful are medical referrals?

Depending on the lens of a conducted study, there will be variations in medical costs. This is something to keep in mind while reading articles on referrals. In an article from the International Public Health Journal, the value of referrals is plummeting. Medical expenses “increased post-referral for patients utilizing the PC [primary care] clinic”.

This quote is baffling since people need referrals from PC clinics to get to other medical services. This quote and the data behind it suggest a need for intervention in some way to reduce costs. The most distinct comparison is in the study, mentioned earlier, which says “group 3 had an average of $4,415 in uncompensated ER care…pre-referral, and an average of $8,012 per patient in uncompensated ER…in the post-referral period.” This data establishes the counterproductive nature of referrals. The reasoning is supported by the finding that “median per capita expenditures were higher for managed care gatekeeping enrollees”.


It’s important to note, that a systematic literature review from the Scandinavian Journal of Primary Health Care found that one case found that prices increased after a referral. Yet, this review also found that for the majority of the cases studied prices stayed the same. The paper says that hospitalization and ambulatory care, which both play a role in ER visits, could be the reason for increased costs post-referral. 


However, this doesn’t clear out the moral concern of required referrals. After seeing prices rise because of referrals, how can the medical industry demand them?

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A paper from the Michigan Law Library discusses the moral implications of how a general practitioner “must become the ‘gatekeeper’ of society’s medical resources. This paper explains in detail the negative effects of medical gatekeeping, including something called a Diagnostic Related Group (DRG). This allows general practitioners to prescribe the most appropriate and optimal medical care without overusing medical resources. The issue with a DRG is that it also allows a physician to make or lose money depending on how the patient follows their referrals. If economic factors play a role for general practitioners, the quality of care that patients receive decreases. These factors result in a negative medical experience since they “dilute the trust” between a patient and their doctor.  

How useful is it to go to a General Practitioner and a specialist?

An article from the British Medical Journal discusses how referrals allow for a better medical visit based on trust. It writes that referrals allow for patients to have two opinions: one from the doctor and one from the specialist. This highlights the importance of establishing a rapport with one’s general practitioner. 


When a patient has a referral, they have two parts of their life studied: their life at home and their ailment. The general practitioner focuses on the patient and their family to get to the root of the problem. The specialist treats the illness and prevents it from getting worse. When you get to know your doctor well, the quality of care you receive skyrockets. This can improve your chances of getting referred to the right treatment and specialist for you.


If economic factors, such as a DRG, exist, there is no room for trust in a doctor-patient relationship. This leads to patients not having faith that their doctors are on their side and want the best for them. 

Why do some studies have opposite findings?

In other articles, they promote using referrals. They stand by the idea that they will reduce costs and enhance one’s medical experience. An article by a University in the Netherlands and an entry from the journal of Medical Care agreed with these findings. 


Each article conducted research into the sum of the costs for patients who had referrals to secondary care locations and compared their expenses to others who did not have referrals. The article from the Netherlands conducted research on a global scale and reported that “per capita, health spending is lower in gatekeeping systems than in non-gatekeeping systems”. The article defines gatekeeping systems as those that demand referrals before accessing other medical care. Likewise, the article from the Journal of Medical care, from the American Public Health Association, concluded that referrals do not contribute to raising the prices of hospital visits. This article researched the prices of hospital visits and compared them between referred patients, transfer patients, and non-referred patients. 


When you look into this discrepancy, you will find that their results were different from the others due to the nature of the referral. 

What should you do now?

Essentially the best option for you depends on what you’re seeking. If you need to go to the hospital, don’t get a referral, but for most other consultations, use a referral. 


Due to the ethical dilemma, try to avoid providers that use DRG’s so economic issues don’t play a role in your physician’s referral for you. If a nation that uses a referral system is rationing health care resources,” there’s no way to get around the possibility of having a provider who uses a cost-containment measure such as a DRG.

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Staying loyal to your physician is the best plan of action. This makes sure that they know you and your family so that they serve your needs well. A physician’s oath to do no harm extends to what they prescribe to a patient, whether it be medication, treatment options, or referrals. You have to trust that your physician will stay true to their oath. Building trust between one’s physician will guarantee the best medical experience for the patient.

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