Primary care physicians (PCPs) are generally the first provider a patient sees for an acute or chronic illness prior to diagnosis. If specialized care, diagnostics, or treatments are necessary, a PCP is also responsible for referring the patient. While this process sounds simple and straightforward, the truth is that broken referral management processes can cause disruptions and leakages, ultimately costing healthcare organizations time, effort, and money, all while potentially putting the patient at risk of receiving subpar care.
This week on the Beacon, we look at common referral challenges and their effect on healthcare personnel, patient outcomes, and payer contracts.
Read on to learn how and why the right referral management system can save your organization time and money, keep PCPs fully in charge of their patients’ care, and improve the patient experience.
Broken Referrals Impact Financial Outcomes, Staff Efficiency, and Patient Experience
While fee-for-service and value-based care models have varying financial incentives, both contracts share issues downstream that result in uncontrolled patient referrals. One known result of this is referral leakage, which is defined as a patient receiving care outside a network of owned, affiliated, or preferred providers. Estimates show the average hospital loses between 10-30% of their annual revenue due to patient referral leakage, resulting in $200-500 million lost revenue each year. It is not uncommon for these costs to inflate over time or potentially compromise value-based care initiatives when PCPs are accountable for the entire cost of care.
However, not all leakage is a result of a PCP referral. Sometimes, it occurs as a result of the patient’s actions. A self-referral takes place when a patient refers themselves to a specialist rather than receiving a recommendation from their provider. This results in lost revenue for the organization due to unnecessary costs associated with additional procedures, lab work, or other serviced rendered. It also means that these patients may not be receiving the lowest cost/highest quality specialty care option. Plus, making a self-referral doesn’t ensure accurate diagnosis or proper evaluation from their PCP prior to receiving specialty care, so the appointment may be unnecessary.
Self-referrals also pose a particular risk to patient experience by placing important decisions into the patient’s hand, such as deciding which specialist to see, providing that specialist with the appropriate information for diagnosis, and taking the correct next steps post-visit. The patient could receive unnecessary care or visit the wrong provider, possibly resulting in misdiagnosis. Situations like these lead to patient frustration and disengagement.
Additionally, if an organization’s referral management system is not optimized, administrative burden is placed on staff. Ineffective referral processes may require providers and their office staff to:
- Call specialist offices individually
- Reach out to patients manually
- Spend valuable time on payer websites to complete prior authorizations
- Manage referral notifications
That means it could take up to 45 minutes to complete a single referral from start to finish given these tasks. This creates a backlog of chores for staff and causes longer wait times for patients.
Fixing a Broken Referral Management Process
An effective, seamless referral process helps providers, physician champions, and other healthcare professionals ensure their organization has the tools they need to reduce losses in revenue related to referral leakages, alleviate administrative burden on staff, and help patients receive high-quality care with each office visit.
The ideal referral management solution:
- Enables providers to build effective referral networks for any type of contract
- Identifies the highest-quality, lowest cost specialists
- Automates manual processes, including prior authorizations, appointment scheduling and follow-up, and patient engagement outreach
- Completely closes the loop from start to finish
To learn more about how Lightbeam’s Referral Management solution helps healthcare organizations control costs and keep patients in-network while saving both time and money, read our Vanguard Medical Group case study.
By Matt Cheatham
Director of Client Success at ReferralPoint