An Evaluative Analysis of the Referral System for Insurance Patients

Han, Dalsun; Kim, Byungyik; Lee, Youngjo; Bae, Sangsoo; Kwon, Soonho

Abstract

This study examined the effects of referral requirements for insurance patients which have been enforced since July 1, 1989 when medical insurance coverage was extended to the whole population except beneficiaries of medical assistance program. The requirements are mainly aimed at discourag - ing the use of to Vii; ry care hospitals by imposing restrictions on the patient's choice of a medical service facility. The expectation is that such change in the pattern of medical care utilization would produce several desirable effects including increased efficiency in patient care and balanced development of various types of medical service facilities. In this study, these effects were assessed by the change in the number of out-patient visits and bed-days per illness episode and the share of each type of facility in the volume of services and the amount of expenditures after the implementation of the new referral system. The data for analysis were obtained from the claims to the insurance for government and school employees. The sample was drawn from the claims for the patients treated during the first six months of 1989, prior to the enforcement of referral requirements, and those of the patients treated during the first six months of 1990, after the enforcement. The 1989 sample included 299,824 claims (3.6% of total) and the 1990 sample included 332,131(3.7% of total). The data were processed to make the unit of analysis an illness episode instead of an insurance claim. The facilities and types of care utilized for a given illness episode are defined to make up the pathway of medical care uti lization. This pathway was conceived of as a Markov Chain process for further analysis. The conclusion emerged from the analysis is that the enforcement of referral requirements resulted in less use of tertiary care hospitals, and thereby decreased the volume of services and the amount of insurance expenses per illness episode. However, there are a few points that have to be taken into account in relation to the conclusion. The new referral system is likely to increase the use of medical services not covered by insurance, so that its impact on national health expenditures would be different from. that on insurance expenditures. The extension of insurance coverage must have inereased patient load for all types of medical service organizations, and this increase may be partly responsible for producing the effects attributed to the new referral system. For example, excessive patient load for tertiary care hospitals may lead to the transfer of their patients to other types of facilities. Another point is that the data for this study correspond to very early phase of the new system. But both patients and medical care providers would adapt themselves to the new system to avoid or overcome its disadvantages for them, so as that its effects could change over time. Therefore, it is still necessary to closely monitor the impact of the referral requirements.