Is It Ethical to Pressure Physicians to Refer In-House?

Leigh Page


May 21, 2019

In This Article

'Leakage' vs 'Keepage'

When physicians recommend tests for patients, or specialists for the patient to see, they like to refer to the physicians they think are best or to the testing facilities that they think will give the best service for their patients.

That ability to refer where they wish is sometimes being eradicated, however, as some hospitals and health systems pressure physicians to refer only within the system, even if they think the patient will do better elsewhere.

Hospitals and health systems are telling their employed physicians that they must guard against "leakage," which happens when patients receive imaging, tests, specialty care, and other services outside the system.

Instead, hospitals want employed physicians to promote "keepage"—making sure patients don't leave the system.

Hospitals educate their physicians about available in-house sources, show doctors their referral scorecards, and use electronic health record (EHR) systems to direct referrals inward.

In some cases, hospitals may resort to more aggressive methods. In a lawsuit filed against Steward Health System in Massachusetts last year, urologist Stephen M. Zappala, MD, alleges that Steward "exerted immense personal and financial pressure on him and other physicians to refer patients only to Steward hospitals and specialists," according to his attorney, Elizabeth Hogue.[1]

Steward officials went so far as to cancel appointments that Zappala's office had made with outside specialists, Hogue wrote. She said they even contacted patients directly and advised them that their surgeries had to be at a Steward-owned facility.

Zappala maintains that when he refused to go along, Steward disciplined him for minor infractions and eventually canceled his privileges, according to Hogue.

However, the health system is contesting the lawsuit, claiming that Zappala was disciplined for legitimate lapses in patient care.

Still, most hospital-employed physicians don't seem upset with pressures to refer in-house, even as they acknowledge that these pressures have become widespread.

In a 2018 survey, 84% of physicians reported that their health system had requirements for referring to in-network providers, and 79% fully or strongly agreed with the requirements.[2] Yet, in Medscape's Ethics Report 2018: Money, Romance, and Patients, Medscape asked: Would you refer patients outside of your health system, despite pressure to refer patients within your system? Eighty-six percent said yes, 3% said no, and 11% said "it depends."

Independent PCPs See Hospital Networks as 'Black Holes'

While most hospital-employed physicians seem unconcerned about hospital-directed referrals, independent physicians tend to get upset. This difference in views is understandable. While hospitals' referral policies provide new patients for employed physicians, independent doctors get shut out.

"Health systems have become black holes; you send your patients into them and they don't come back," says Ernest Buchanan, MD, a family physician who is one of three doctors in an independent practice in Cookeville, Tennessee.

For example, he says that one of his elderly patients fractured a hip and went to the emergency department (ED) of a hospital that was part of a large health system. Buchanan had arranged for the patient to be treated in an independent hospital where he had privileges, but the ED physician transferred him to a larger hospital in his system.

"The patient got good care but I don't see how this transfer truly benefited him," Buchanan says. The patient was stuck in a large, anonymous system, away from his preferred doctor.


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