Referral Leakage And Ways To Prevent It

Referral leakage (also called as Network Leakage) happens when primary care physician (PCP) refers their patients to health care provider or specialist (outside the network). When this referral process tends to take place repeatedly it will lead to loss of revenue.

Referrals are made to provide better care to patients by avoiding medical complications. PCP’s will not refer patients to other practice specialists until there is a necessity. The PCP send patients to outside providers because they don’t have proper facility, or lack in quality equipment, resource to treat them and in some situation, the patient wishes to get referred or there is a medical emergency.
Referral leakage not only eats up the revenue but also results in patient leaving your network. So if organizations are making many referrals to outside providers then you need to identify why the physicians are referring them out. Because the patients whom you are referring out may not return back which means you are losing your valuable patient. Followings are some reasons why health organizations lose their patients due to referral leakage:

  • Not enough resources available or when the organization has limited access
  • Patients who want to seek a second opinion from the specialist
  • When geographical location or distance is a concern
  • When patient-physician meeting did not happen at the scheduled time
  • Expensive specialist
  • Poor facility and service
  • The gap in patient-provider communication

To have a tight hold of your patients, you will need an effective software system which must have the capability of capturing or tracking data to disclose all the referral network pattern. Implementing referral system into your practice will make your practice management steps easier.

Identify a software with following capabilities:

  • Ability to track the referral network pattern (both inside and outside)
  • Identifies patients who leave your organizations
  • Captures reason for being referred out (i.e. lack of resources or specialist, emergency etc.)
  • Records all details related to a referral made (such as outside provider name, location, referred physician, the reason for referring)
  • Dashboard which has all detailed about IN & OUT referral that help to get better insights

Tools will give all required patient details which will also help to update patient information within the network. Using data analytics will help to get insights about data that will help prevent leakage by focusing on three key areas: Network Pattern, Network Optimization, and Growth Planning.

Understanding current network pattern
Analyze and understand the behavior of patients both inside and outside of the network across practices, physicians, and locations. Using web-based solutions, track these data to reveal the referral pattern. Using that pattern to educate in-network providers to minimize the referral leakage.

Perfecting current process to prevent leakage
Daily reporting on patient’s health status and usage of tools help to gather information to trace patient behavior pattern. So providers need to improve physician awareness with reporting tools.

It is providers’ responsibility to keep their loyal patients. To retain their patients they first need to identify what’s patient expectation from competitors practice. Identify the gaps and implement it in practice to avoid a patient shift to other networks.

Building a better care system
Equipping health systems with software tools will help to optimize referral networks. By focusing on network optimization, we not only reduce referral leakage it also directs healthcare system on the right path. So healthcare organizations need to build clinical integration networks.

Referrals impact adversely in the revenue cycle of providers, and they most often fail to realize the importance of losing a patient and revenue while directing patients to a specialist outside of their network which could be prevented by building clinically integrated networks that will help to analyze problems within the network and prevents referral leakage.