Four causes of referral leakage, and how to address it
Let’s face it – leakage is an unappealing term, both the word itself and in definition. Leakage refers to the care patients receive outside of a predefined network, either by choice or because of a provider referral. Leakage is also commonly referred to as “out-migration” and “patient keepage” – for our purposes, we’ll refer to it as out-migration. It’s no secret that out-migration is a major contributor to lost healthcare system revenue. But tracking and influencing referral patterns is easier said than done. While it’s not an issue that can be solved overnight, there are a number of strategies your organization can employ today to address this important issue.
A 2018 survey conducted by Sage Growth Partners revealed that nearly 90 percent of healthcare executives agree reducing out-migration is very important or extremely important. However, the same group of survey respondents also report low levels of tracking and understanding out-migration. The same survey showed nearly half of the organizations (most of which were hospitals or health systems) responded that more than 10 percent of annual revenue is lost to out-migration, while another fifth of respondents said their out-migration-related revenue loss exceeds 20 percent of annual revenue. Nearly 25 percent of respondents did not know how much revenue they’re losing to out-migration annually.
Know the reasons
The first step towards reducing out-migration is understanding where and why it happens. Let’s take a look at some of the top reasons out-migration occurs.
- Not analyzing data in the first place. You’re probably aware out-migration exists in your network, but do you know which patients are going where and why? Additionally, many organizations don’t follow up with patients after a referral is made outside of the network to find out if patients followed through with their visits and when they are next scheduled to see their regular, in-network provider.
- Lack of provider awareness. Providers have perhaps the greatest ability to influence where patients receive care. However, if providers are unaware of which specialties and services are available in-network, they’ll likely continue referring patients to providers with whom they’re familiar, regardless of network affiliation.
- Assuming it’s someone else’s job. One challenge with managing out-migration is no single person within a network or even an individual hospital or provider practice is responsible for preventing out-migration. Many individuals employed within your network come in contact with your patients and, perhaps unknowingly, influence where patients receive care.
- Patient and/or provider choice. Often the cause of out-migration comes down to patients leaving the network because of location, recommendations from friends or relatives, or a previously established relationship with a particular provider. Similarly, sometimes referring providers knowingly send patients out-of-network to providers with whom they have a personal relationship, or they may be displeased with the reputation or accessibility of in-network providers.
Steps to reduce out-migration
Fortunately, there are steps you can take to better understand the causes of out-migration and apply solutions to address them.
- Dissect your data. Data is one of your most valuable assets to understand and reverse out-migration. If you don’t have direct access to claims data, work with leadership at your health system or provider organization to gain insights from and understand patterns in claims data.
- Make it easy for providers to refer to in-network services, including hospitals, ambulatory surgery centers, urgent care and specialists:
- If you work for a healthcare system and your system employs providers, start with them. Educate them about which specific services your health system provides – don’t assume they already know.
- Generate and track referrals directly from the electronic health record (EHR). While EHRs are not the best system for managing referrals, it’s a tool most providers have at their disposal today. Appoint a champion (such as a referral coordinator) to support providers in tracking their referrals and following up with patients after they’re referred. Closing the loop on referrals also reinforces the primary care provider’s role as the quarterback of patient care.
- Work with leadership at your health system or provider organization to maintain and promote an up-to-date, in-network provider directory with detailed descriptions of subspecialties and clinical interests for specialists in your network. Often provider directories simply categorize providers by their broad specialty or even alphabetically. Make this directory available to providers electronically and be as specific as possible. If possible, load it into the EHRs, ideally where providers are generating referrals.
- Regularly communicate new and existing ancillary services available through your in-network hospitals (such as laboratory tests or diagnostic imaging). Providers may already know, but it never hurts to remind them.
- Streamline the delivery of results back to referring providers. Consider setting up an interface to deliver laboratory and diagnostic imaging results back to ordering providers electronically. Providers will appreciate receiving results directly in their EHRs. The upfront cost may be high, but it may be well worth it to retain as many of these services in-network as possible.
- Advocate for strong “referral etiquette” amongst providers. Primary care providers expect to receive consult notes back from the specialists to whom they refer. But are they extending the same courtesy? When your employed providers refer to specialists, encourage them to proactively share information about their patients with the specialists to whom they’re referring. Someone in the referral coordinator role can champion this effort.
- Encourage providers to educate their patients on the benefits of staying in-network. Providers will be better positioned to closely coordinate care when their patients stay within the network as well as prevent duplication of high-cost services. Furthermore, this cohesiveness in care improves patient satisfaction and allegiance to community-based healthcare services.
- Make it easy for your patients to stay in-network with point-of-care scheduling. Assist patients in booking their appointments with specialists at the time of the referral. This is another great opportunity for a referral coordinator to boost patient engagement and satisfaction.
As you can see, addressing out-migration doesn’t have to be a massive undertaking. While there may not be a “one-size-fits-all” approach to solving the problem, employing the methods described above can make a positive impact on reducing out-migration in your network.