Fixing the Hole: Using Data and Technology to Reduce Preventable Patient Referral Leakage

August 10, 2018

// By Althea Fung //

Althea FungPicture this: A patient goes to her primary care physician with complaints of dark, dry skin patches on her arms. The doctor, who is a staff physician at a large health system in New York City, quickly determines that she has acanthosis nigricans and prescribes a topical ointment. The doctor also suggests she see an endocrinologist to determine if the condition is associated with an endocrine or hormonal disorder. As the patient prepares to leave the office, the front-desk attendant hands her a referral to an endocrinologist — at a competitor organization.

While there are many good reasons why the doctor might have referred the patient to an outside physician, from an organizational standpoint this occurrence — known as referral leakage — is bad for business. Organizations lose on average $780,000 annually per employed physician that refers out of the health system, according to ReferralMD, a physician referral management organization. That translates to an estimated $200 million to $500 million in lost revenue to competitors each year.

Arizona Care NetworkArizona Care Network (ACN), a Phoenix-based accountable care organization that partners with Dignity Health, Tenet Health-owned Abrazo Community Health Network, and independent providers, saw referral leakage as a problem that could be easily solved.

Debra Stevens, executive director of marketing and communication at ACN

Debra Stevens, executive director of marketing and communication at ACN

“For a provider network to be successful in value-based medicine, it must coordinate patient care across the entire continuum of care,” says Debra Stevens, executive director of marketing and communication at ACN. “This is a complex effort, requiring collaboration among facilities, providers, and services using technology, data, and analytics to achieve our goal of improved health outcomes at a lower total cost of care. Also, CMS, through its implementation of MACRA, has placed a strong emphasis on coordinating services within an ACO.”

Read our latest article to find out what ACN did to drive monthly referrals from 1,200 to 5,400 in less than a year.

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