How to Optimize Informed Referrals

June 29, 2016


Referrals are a key opportunity for your organization to improve outcomes, satisfaction, and profitability. What are the potential costs and benefits?

Costs of Inappropriate Referrals

As Healthgrades Board Vice Chairman Roger Holstein explained at the 2016 HealthShare Executive Summit, “Inappropriate referrals not only lead to higher costs and poorer outcomes, but also reduce profitability in both the fee-for-volume and fee-for-value worlds when 30-40% of referrals leak to out-of-network providers.”

Where do these costs originate?

  • Financial Cost: When patients seek specialty care out of your care network, it can lead to redundant testing, potential out-of-network care costs, and increased utilization due to uninformed specialist choices. All of these factors increase costs for patients, their employers, and their insurers.
  • Poorer Outcomes: When patients visit an outside specialist whose skills, experience, and satisfaction ratings have not been vetted, they are at risk of poorer care outcomes. That risk increases when seeking care in lower-performing hospitals. Further, care information can be lost, hindering effective follow-up care.
  • Reduced Profitability: Under value-based reimbursement, your organization’s goal is to avoid unnecessary care while providing the right care at the right time with the right doctor. But when patients who require specialized care seek it elsewhere, you miss out on higher-margin specialty care and procedures.

Linking Primary and Specialty Care

Referrals are the link between primary and specialty care. How can you empower your primary care physicians and their patients to work together and find the right specialist within your care network? The key ingredient is value-based information.

  • Patient Choice Drivers: Recent Healthgrades research showed that 85% of patients would change their original choice of specialist when given information on specific experience and associated hospital quality. In fact, consumers are twice as likely to choose a given specialist when provided with three criteria: physician experience, hospital quality, and patient satisfaction.
  • Physician Choice Drivers: Physicians agree. Fully 65% feel that having additional information about other physicians would help them make better referrals. They are particularly interested in the concentration of a given specialist’s practice devoted to a specific condition or procedure (80%), and the volume of patients seen for that condition or procedure (85%).

Help your physicians and their patients work together to make better choices. Promote informed choice by making it more convenient and cost-effective for them to identify specialists with appropriate experience within your organization. Think in terms of “e-prescribing” specialist care. What contextual information is necessary?

First, complete robust online profiles for each of your affiliated specialists, including accepted insurance plans, affiliated hospital quality, physician experience, practice focus, and patient satisfaction. This benefit and clinical information allows patients and their doctors to jointly prescribe the right specialist the first time. Next, to increase convenience, add the ability to make online appointments and even obtain prior authorization automatically.

The result of linking primary and specialty care will be high-quality, efficient healthcare that provides continuity, patient and physician satisfaction, and profitability. That is the optimal connection between the use of care resources and quality outcomes that support patient priorities.

What is the missing link between primary and specialty care? It is information that empowers a patient-centric approach to making better referral decisions.

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