The real value of referral management?

A recent publication by the BMJ, following a successful Freedom of Information (FoI) request, reveals the considerable use of referral management schemes by CCGs. Rightly, the publication has generated an important discourse on how CCGs, and other organisations, commission value.

Some of the key points revealed by the FoI request:

  • 72 out of the 184 CCGs that responded commission some form of referral management service
  • 10 CCGs provided evidence of savings
  • 9 provided data demonstrating that they had not saved money overall
  • 50 CCGs combined had spent £57 million on referral management since April 2013
  • 84,000 referrals were returned to GPs in 2015/16, approximately 4% of all those processed

Commentators have been quick to scrutinise the value of these services, focusing predominately on the cost and a perceived lack of saving.

Dr Chaand Nagpaul, BMA GP committee chair, commented ‘CCGs are using a range of referral management schemes, many without any clear evidence of benefit, in a desperate attempt to reduce their costs. These schemes put a barrier between a GP making a referral and the hospital specialist, and can further the wait for patients.’

This generates an important question about value generally. How do we measure value? As noted in the FoI results, referral management services are commissioned for different purposes; some are commissioned to improve referral quality and others are designed to enhance patient choice and improve booking functions. Not simply to save cost.

Measuring the value of referral management services on savings alone, therefore, appears counter-intuitive. If the core purpose of a referral management service is to assist patient booking, a better question to ask would be ‘how many patients did they speak to?’. Doing so may contribute to valuable analysis.

However, if we choose to assess referral management services solely on a financial basis, then the figures revealed in the FoI request enable us to so.

According to the BMJ 84,000 referrals processed were returned, mostly due to missing information. Let us assume that 50% were returned due to missing information, and so would require a second appointment (charged at a median cost of £103 each), and let us assume that 50% were not necessary to begin with (saving a median of £178).

84,000 x3 x 140 = a saving of £35 million

Considering the cost of incomplete referrals shouldn’t the question really be: “How can you be spending the NHS’s money without instituting referral management?”