Addressing Referral Leakage in Healthcare - Jade Global

According to an industry report, 78% of healthcare services and delivery leaders say the COVID-19 pandemic, and its transition to an endemic, have made controlling patient leakage a higher priority. The continuing lag in recovery and recuperation to reach normalized pre-pandemic new patient volumes and existing patient visit frequency from their established panels — coupled with the additional headwinds of staffing shortages, supply chain disruption, new entrants into the care delivery landscape, and the increasing costs associated with delivering care — is negatively impacting financial stability, and contributing to negative EBITDA trends.

That same report revealed that 65% of healthcare system leaders and providers confidently state that continued increases in referral leakage blocked them from reaching and achieving their strategic imperatives in 2022 and has strained the revenue streams associated with those imperatives. They also believe that this trend will continue through 2023, and mitigation strategies are an urgent need.

Yet, despite these statistics, the majority of healthcare delivery leaders and providers across all care and service silos within the industry have not been able to facilitate a consistent and centralized process-driven approach to quantify, assess, and visualize the totality of their referral volume and its patterning. They are unable to consistently identify and isolate the reason codes (both controllable and non-controllable) creating or contributing to their gross and net leakage rates without extensive effort and heavily manual process flows, and they do not have the resources to execute this initiative with the frequency and consistency required to effectively measure, manage, and implement corrective actions to reverse the trend.

The key to mitigation and remediation of the trend is to understand how to solve the leakage, optimize the contributing factors driving the keepage, and how to better define the true penetration of the consumer/patient/provider market that generates the referral volumes, by type, payer mix, and condition code needed to attain the topline revenue and growth targets for their business models.

Nine out of 10 healthcare executives and providers are not highly confident in their capabilities to achieve needed visibility into their referral leakage. 75% are not sure what is driving specific service line referral leakage or how to prioritize and remediate those that have been most impacted in terms of immediate volume and top-line revenue losses, as well as quantify and address impacted downstream revenue from loss of those referral volumes. Moreover, they have limited visibility in identifying which service lines are actually primed for natural growth given the service demand in the market they serve.

Why referral patterning is important and its influence on referral management

Provider referral patterning is an essential part of the provider referral management and provider relationship management model. Its functional approach and capability to create a centralized mapping and data visualization tool produces a 360-degree aggregation of the quality and quantity of ambulatory referrals, ancillary order sets, outpatient diagnostics order sets, and surgical scheduling order sets, reconciling them with clinical care delivery data for purposes of improving and growing the quality of the internal and independent Clinically Integrated Network (CIN).

This model allows for an accounting of visibility to actual and trending market penetration/saturation rates, referral/order-type mix, payer mix, reason codes for gross referral/order capture/leakage and keepage, and net conversion capture/loss rates. It’s an invaluable tool to align efforts to promote growth, attribute the impact of marketing campaigns and outreach, and gain visibility into Physician Liaisons’ and Business Development Managers’ productivity and performance, provider service recovery needs and results, predictive modeling, capacity management, and alignment of supply-demand modeling for care delivery against market trends.

In addition, it also allows for the ability to incorporate a healthcare system or provider’s claims data, as well as third-party claims data, to heatmap the market and identify and execute tactics to capture referral share that is currently untapped, or competitively held. It provides visibility into pockets of a healthcare system or provider’s areas of exposure that could result in market share loss.

As the model progresses in execution, it also allows the ability to truly understand the reason codes that are creating leakage of referral volume. For example, referral volume may be impacted by access issues, a lack of closed-loop feedback to the referring provider, or referral turnaround and processing times. The patterning approach allows for attribution of the leakage to the reason codes and then yields the ability to take the needed remediation paths or implementation of best practices to curtail leakage. The model also allows for the identification of the optimal or needed paths to take or create with people, processes, and technology.

Even more valuable, this provides insight into non-controllable market conditions, allowing for the appropriate provisional action to take to offset the impact on volume from those reason codes. An example of this would be losing exclusive status with a payer that could result in loss of referral volume, allowing for the system to quantify that risk and execute precise and aggressive retention marketing campaigns to patients/consumers with that payer coverage and their provider/care network team.

It could also be something as simple as identifying the need for expanding hours of operation for convenience to the patient/consumer population. Or positioning the brand awareness of the quality of care and clinical outcomes provided to the market by the healthcare system or providers to retain or win back potential patients that may leave or have churned out of the panel as a result of that payer status change.

How leveraging healthcare data analytics and CRM solutions for provider referral patterning helps healthcare systems and providers

Most large healthcare systems have anywhere from 50 to 70 percent dependency on referral volume from a CIN for their total revenue streams. Yet many healthcare systems are not effectively marketing themselves as the destination point for both patients and providers.

Providers act as the catapult and the net for the patients who walk in their front doors. However, healthcare systems have been latent in adopting acquisition-based strategies and governance models to effectively drive those patient volumes to their front door, especially when it comes to technology adoption. The two areas in which healthcare systems are typically not optimizing technology platforms are the business development/physician liaison group and the marketing group.

Most healthcare systems rely on a fractured provider relationship management model that does not allow them to capitalize on the benefits of a provider referral patterning model and the provider referral and provider relationship management processes and models in place. Many are using outdated platforms, or even spreadsheets, instead of leveraging Data Analytics and CRM platforms for healthcare providers to piece the data together. This highly inefficient and time-consuming process results in a lack of 360-degree visibility for business development, clinical care delivery, and operational teams.

By leveraging healthcare Data Analytics and CRM solutions a provider can centralize the accounts, activities, and contacts that define its CIN and the marketplace. The platform can also act as the central repository for provider referral patterning and the data visualization tool that aggregates all pertinent data types to allow for seamless reconciliation and attribution, all in an automated fashion set to the cadence preferences of the healthcare system or provider.

The platforms pull data from the provider’s EMRs and third-party data sources (Claims Data, PPH Systems, etc.). It then layers the data and heat maps the marketplace to identify where the referrals are coming from in terms of volume, payer mix, and referring/ordering source. The platform then reconciles that information with the referral/order patterning that the system has seen and the overarching operational capacity in order to identify where and how referral/order leakage can and will occur, and quantify the impacts both in the arrears and for future state forecasting and predictive modeling.

The platforms enable providers to effectively improve the measurement, management, and optimization of their CIN volumes. They act in tandem as a repository of information, and providers can take action against that information that allows them to:

  • Target growth opportunities for new patient volume and with specific providers based on where their occupancy or capacity rates are with service lines.
  • Identify where they may need to protect their market share by seeing potential overlaps with a competitor in the marketplace.
  • Recognize improvements to their overarching service offerings to the system and the CIN and develop new services based on referral or order patterns or expand locations or hours.

Provider referral patterning and its interoperability for provider referral and provider relationship management can all be operationally enabled by Data Analytics and CRM platforms for healthcare. The platforms can integrate seamlessly with an EMR and with any internal or external claims data sources, data lakes, or Population Health systems. This allows for seamless access to specific information that validates what the referral patterning looks like in terms of what’s been captured and lost and what the market opportunity may look like.

The data and analytics capabilities facilitate data visualization with a dashboard model that allows the user to look at overarching volumes, penetration rates, service scoring, supply-demand modeling, access and capacity validation, and heat mapping of market penetration.

Jade Global, with 20 years of industry leadership, stands as the premier partner in Healthcare and Life Sciences, offering tailored solutions and unparalleled industry expertise. As a HIPAA-compliant organization, we uphold the highest standards of data security and privacy, empowering you to focus on patient care and operational excellence.

Schedule a meeting with our HLS experts to discuss how we can help you.

About the Author

Robert Jehling

Robert Jehling

Senior Director, HLS

Robert has over two decades of experience in Healthcare and Consumer Services, holding various Executive Leadership including Chief Experience and Chief Access Officer for a top 25 Integrated Healthcare System, Consultant and Solution Design SME to National and Global Healthcare Systems, Payors, and HLS Product/Service Providers and Fortune 500 organizations. He has been an Executive Leader in the areas of Consumer/Patient Lifecycle Management, DAAI, Digital Transformation, Revenue Cycle Management, Clinical and Business Operations, Marketing, Growth/Retention Strategy,and M&A.

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