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The danger of blanket financial incentives

From Candace Imison, Director of Healthcare Systems at the Nuffield Trust

The recent investigation by Pulse that found that GPs were being offered financial incentives by CCGs to reduce their rate of referrals should send alarm bells ringing at NHS England. Not only does it suggest a fundamental misunderstanding of how to interpret different referral rates, but much more importantly, it is a sign that CCGs are willing to take actions to contain costs without fully thinking through the potential risk to patients.

It is easy to see the attraction of encouraging GPs to aim for the lowest rates of referral in their area. As my King’s Fund analysis from 2010 found, there can be up to a ten-fold variation between rates of referral at practice level. A strategy that aims to ensure all practices refer at the rates of the lowest practices would look financially very attractive. But it is not that simple.

Changing referral behaviour is not something to be left the blunt instrument of a blanket financial incentive

Many factors influence the rates of referral, not only the type of patients a practice serves, but also the confidence and skills of the GPs in that practice. And advanced skills don’t always mean low rates of referral. A counterintuitive finding from the introduction of GPs with a Special Interest (GPwSIs) was that in some cases rates of referral went up as the GPwSIs were more attuned to spotting the patients requiring specialist care. We also know that many patients with cancer and kidney disease are referred late. These late referrals are life threatening. So there is strong evidence that under-referral is just as much of a problem as over-referral. In this context it is dangerous to introduce blanket financial incentives to reduce referrals.

My research concluded that the best way to manage referrals is to ensure that each practice systematically reviews and audits the referrals it makes. This may include looking at how their rates of referrals compare to comparable practices, but the rate of referral should be seen as a ’tin-opener’ to trigger discussion rather than a number on a ‘dial’ of performance. Close working is also needed between primary and secondary care clinicians to develop clear referral criteria and evidence based guidelines. The ability to follow guidelines will become considerably easier as clinical decision support tools become embedded in GP clinical information systems. A good audit process will unpack training and development needs in GPs and not only improve referrals but enhance a GP’s clinical skills and decision-making.

Changing referral behaviour is a major change management task that requires strong clinical leadership from both primary and secondary care, not something to be left to the blunt instrument of a blanket financial incentive.