Most HMOs Use Drug Formularies to Influence Prescribing Behavior of Docs

Study of how managed care organizations affect the use of high technology services

From 1995 to 1998, People-to-People Health Foundation, Millwood, Va., examined the management tools and strategies that managed care organizations use to influence technologies used by primary care physicians—including how to prescribe drugs and make referrals to specialists.

This project was part of the Robert Wood Johnson Foundation (RWJF) national program Changes in Health Care Financing and Organization (HCFO).

Key Findings

  • Most health maintenance organizations (HMOs) use a list of preferred drugs, known as a formulary, to influence the drug-prescribing behavior of primary care physicians.

  • The majority of HMOs govern access to specialists by requiring primary care physicians to follow specific referral procedures.

  • The study also yielded findings on profiling of primary care physician practices and how management tools and strategies vary according to the method HMOs use to:

    • Compensate primary care physicians (e.g., salary, formulary).
    • Encourage primary care physicians to prescribe generic drugs.
    • Profile of primary care physicians' prescribing rates.
    • Educate primary care physicians about drug prescribing.

    The tool used by most of the surveyed managed care organizations is the formulary (86%). Within large HMOs (with more than 30,000 enrollees) the formulary is used even more often.

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