Physician referrals and the medical market place

Factors determining the extent to which physicians obtain new patients through referrals are examined. A more thorough understanding of physician referral patterns can help to explain how competitive forces function in this market and how physician characteristics and credentials affect individual performance. Referral networks promote entry by young physicians into both primary and nonprimary care medical markets. Nevertheless, there are marked differences in referral patterns between primary care and nonprimary care providers. For instance, referrals are directly related to the degree of market competition and board-certification status among primary care physicians but not among nonprimary care specialists. Membership in a group practice is related to significantly more referral activity among nonprimary care physicians but not among primary care providers. No significant differences were found in referral patterns by physician sex. Although foreign medical graduates (FMGs) receive proportionately fewer referrals than do U.S. medical graduates, the differences are not large. While earlier research suggests that the returns to board certification are higher for female physicians, the present study finds little evidence that board certification is particularly helpful to either female physicians or to FMGs in terms of obtaining patients on referral.