3 Consequences of Poor Patient Referral Management

August 18, 2022 | Carenet Health

Referral management Impacts both Patients and Providers

Referrals can be a stressful transition for patients especially at a time when they are experiencing an escalation of care or change in diagnosis. Quality health outcomes depend upon patients' adherence to recommended treatment regimens and that starts by providing patients with clear expectations and visibility into their care transitions. A strong referral management process can determine whether or not a patient gets the care they need.

Referral Management Impacts both Patients and Providers

Coordinated care is a critical building block for value-based care and an important part of the patient experience, but the current process for most health systems prevents easy referral management. Poor coordination of patient care transition results in patients forgoing recommended care or exiting a health system’s network out of frustration. This drives up administrative costs, compromises patient outcomes, and results in lost revenue.

What are the top three consequences of poor referral management?

Poor patient outcomes

Lost revenue from referral leakage

Lower staff efficiency

Read on to learn more about these health system consequences, along with strategies for closing the patient referral loop.

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Poor Referral Management Leads to Poor Patient Outcomes

Let's face it. The biggest issue with healthcare referral management is that patients don't follow-up. Patient non-adherence is a pervasive threat to the health and well-being of patients and a risk factor for subsequent poor health outcomes. According to Becker's Hospital Review, approximately 33% of patients do not follow up with the specialist to whom they are referred. This leads to a gap in the continuum of care for patients and ultimately creates higher acuity cases.

In addition, 40% of patients that follow through with a referral never follow up with the referring physician after the care is initially provided. This creates a breakage in the flow of critical information between physicians, and, in some cases, the patient is forced to be the communication channel during the referral process. It's important for physicians to have an updated medical record to provide the best care for their patients. Referrals are an integral part of managing care and ensuring high-quality outcomes. Utilizing a referral management solution improves patient outcomes and engagement by closing the referral loop and ensuring continuity of care.

Referral Leakage Leads to Lost Revenue

Another consequence of poor patient referral management is referral leakage, which has contributed to millions in lost revenue for health systems. In fact, 43 percent of health executives patients going elsewhere for care is costing their organizations more than 10 percent of their revenue, while another 19 percent of executives say it's costing them more than 20 percent of their revenue.

Understanding the actual causes of this leakage and taking tangible steps to address this challenge are vital. Yet, almost one quarter of healthcare executives say their organization doesn't have a plan in place for monitoring and reporting on patient leakage. Even those who do track leakage aren't exactly sure what to do with it, with 20 percent of respondents reporting they don't know where and why patient leakage occurs.

Making even small changes in provider follow-up can have big impacts on referral follow-through. Following up with patients immediately after the referral is made to schedule their appointments and sending timely appointment reminders increases the likelihood of patient adherence. By implementing an effective referral management solution, fewer patients should be leaving your health system for care, which reduces referral leakage and saves you millions of dollars in lost revenue.

Outdated Referral Management Systems Lead to Lower Staff Efficiency

One out of every three patients are referred to a specialist each year. These referrals are sent through multiple channels like phone calls, website forms, and emails with fax being the most used channel. Despite the array of digital patient referral management solutions, health systems are still following the old school model of referring patients through fax machines and paper-based letters. This outdated referral workflow is inefficient and costly. Staff members spend valuable time faxing referrals, sitting on phone calls with specialists, and following up with patients.

Referral management software can streamline communication between the referring provider, receiving provider, patient, and other healthcare providers, which saves time and enhances the quality of patient care. Not to mention, it eliminates the burden on staff and allows them to focus on other administrative tasks – reducing operational costs for referral follow-ups.

Upgrade Your Organization’s Patient Referral Management

Referrals are a critical moment in a patient's journey with significant implications for patients and providers. Poor referral management not only results in lost revenue but can be damaging to a health system's reputation and brand value. A streamlined referral management solution has the potential to standardize the referral process, optimize staff resources, and bring more referred patients through your front door. To learn more about how we can help you close the referral loop, download our Referral Management data sheet.


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